Last month, the UAE’s Telecommunications Regulatory Authority (TRA) released an interesting survey based on the habits of the country’s telecoms users.
It found — to the surprise of absolutely no-one – that the majority of respondents are pretty unhappy with the cost of the nation’s internet services. Just eighteen percent pronounced themselves to be satisfied with the price of mobile internet, while 51 percent said they were neutral, or dissatisfied over the costs for their leased lines.
And despite the perceived high costs of broadband packages here in the UAE, these services formed the basis of the majority of complaints made by customers. Of all complaints made to either Etisalat and du — the UAE’s two telcos — 42 percent of these related to internet services, with 38 percent related to fixed-line services and just 11 percent for mobile services.
Hot on the heels of the TRA survey came another report from telecoms consultancy Ovum, which surveyed nineteen emerging markets and found that the UAE “is one of the more expensive countries for broadband”. The firm indicated that subscribers in Middle Eastern countries were paying eight to ten times more for home broadband services than customers in Central or Eastern Europe, which are also emerging markets. Only South Africa and Nigeria had higher costs for a broadband connection than the UAE, where your cheapest option with Etisalat will set you back a hefty $848 annually.
By comparison, take a look at Turkey. According to the OECD’s most recent statistics, the cheapest annual broadband subscription — including the cost of line rental — amounts to just $171. Yes, its telecoms market may be more developed than those in the Gulf, and yes, its 74m population makes it easier for Turkey’s telcos to find better economies of scale. But should UAE consumers really be paying five times more for exactly the same service?
The arrival of du in 2007 was meant to change all that. And the company has certainly performed well. Its second-quarter results showed that du had now garnered a 44 percent market share of the UAE mobile sector, with profits before royalties of 56m, while Etisalat showed a loss of $70m, albeit from a much higher profit base. Both companies might be edging closer to parity — at least in terms of customers, if not profits – but four years after du’s introduction, how, exactly, are consumers benefiting? Infrastructure sharing should come into play before the end of the year, which will help ease costs at both companies, and it is to be hoped these savings will be passed on to subscribers. But plans for mobile number portability — which allows users to switch operators without changing their telephone numbers — don’t seem to be anywhere on the immediate horizon.
In Qatar, the introduction of an outside player, Vodafone, resulted in prices for some international calls dropping by more than 60 percent. Consumers in the UAE may be generally wealthier than those elsewhere, but their pockets will continue to empty rapidly as long as prices remain so high.
(Ed Attwood is the deputy editor of Arabian Business. The opinions expressed are his own.)
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