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Homepage | Cover Story | Breaking the du-opoly
Breaking the du-opoly
Broadband is up to fourteen times more expensive in the UAE compared with other markets. But an expected price war between telcos Etisalat and du could save consumers serious money.
When UAE telecoms provider du launched commercial services in February 2007, many expected that the new competition in the market would benefit consumers, who under the incumbent Etisalat had been hit by relatively high telephone charges – and exorbitant broadband fees.
Instead, the only competition seemed to centre on marketing and branding: Even today, the pricing structures of these two ‘competing’ telecoms companies remain almost identical.
According to their websites, Etisalat and du have the same pricing for their basic postpaid mobile phone services. And the two service providers’ broadband charges are virtually identical – not to mention among the highest in the world.
In fact, Etisalat and du charge up to fourteen times the fees for their broadband services compared with other markets.
According to a Kipp survey, Etisalat customers pay AED499 a month for an 8Mbps broadband connection – while their counterparts in the UK, using popular provider o2, pay only AED75 a month. The o2 package includes a free wireless router (which costs AED240 extra with Etisalat) and connection (up to AED200 with Etisalat). Furthermore, o2 customers get two months’ free internet, and the company’s mobile phone customers can benefit from a monthly discounted rate of AED45.
And so, the total annual fee for the 8Mbps broadband service with Etisalat (including modem) is AED6428 – compared with just AED450 with o2 (assuming the consumer is a mobile phone customer too). This means that UAE consumers pay up to fourteen times more for a broadband connection compared with their counterparts in the UK.
Both feature in the top five mobile makers in the world. But whose tills are ringing the loudest?
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I believe Etisalat makes around AED1.5 billion per quarter in profits. Introduction of DU has done nothing.
What needs to happen is for more international companies being allowed into the UAE to compete on an 'equal playing field', which will create more competition and therefore benefit the consumer as well as the companies in question. This is why Broadband charges are so reasonable in the UK. However, alas this is of course is a 'pipe dream'.
keep dreaming.
Its high time the TRA did its job properly and worked for the consumers and not the operators. There is still no free competition on the fixed side. I tought that the WTO set dwon ruling that te U.A.E must liberalise its market, seems like the WTO has been fooled.