This year’s GITEX will be the first featuring two fully-fledged telecom operators from the UAE, after Etisalat’s status as the sole telecoms provider in the UAE since 1976 was quashed following the launch of du in February this year.
The nature of both telephone operators really could not be further apart – one’s an international titan, and the other a domestic upstart – and at this year’s GITEX, they will be competing even further.
Subscribers
The UAE has the highest penetration of mobile services in any country in the world.
In terms of subscribers, Etisalat said in June 2007 it had a total of 5.99 million mobile subscribers representing a penetration of 142 percent in the UAE compared to du’s 553,00 subscribers by the end of the same period.
Within the fixed line service, Etisalat in the same period had 1.31 million lines whereas du has only just launched its fixed line service on July 26.
Controversy over the fixed lines services erupted after du’s CEO, Osama Sultan, said the company had missed the UAE regulator’s deadline of July 12 deadline this year because it had been waiting for confirmation on testing from its rival.
Profits
In terms of profits, du said in July it had made a net loss in the six months to June this year of AED 496.7 million compared to Etisalat’s net profit in the first half of this year of 3.732 billion this year.
du, which had net revenues in the same period of AED 485.5million, said it expects to turn profit by early 2010.
Market capitalisation
According to the Dubai Financial Market, du has a market capitalisation of $5.3 billion and only operates in the Emirates, which is why some have deemed it a domestic upstart.
Etisalat, on the other hand, is in the Financial Times Top 500 Corporations in the world due to its market capitalisation of $20.6 billion, boosted by over 33 million subscribers in its operations in fourteen countries.
Ownership
It is common knowledge in the UAE that every major successful commercial company from the country has some ownership by the emirate’s government – and the telecoms sector is no different – the UAE government owns 60 percent of Etisalat and 40 percent of du.
Forty-percent of etisalat is lsted on Abu Dhabi’s stock where as du’s ownership is split down, 20 percent for the Mubadala Development company, 20 percent for the Emirates Communications and Technology Company (Telco) and the remaining 20 percent owned by the public.
Competition
In terms of competition, the main difference between the two mobile operators is that du provides a per-second price edge which etisalat says at the time it has not plans of implementing.
But one of the major stumbling blocks at present to effective competition between the two is that Etisalat is restricted from providing telecom services in UAE freezones, which are operated by a major du shareholder, Telco.
Moreover, at present within the UAE, though residents have a choice of mobile provider, both du and etisalat still retain monopolies for TV and internet services in certain areas.
Emirates Integrated Telecommunications Company-Du will be exhibiting at stand Z-G10, Hall ZA.
Emirates Telecommunications Corporation-Etisalat will be exhibiting at stand Z-A1, Hall ZA.
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