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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.
January 26, 2010 1:57 by Ben Flanagan
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.
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6 Comments
The prices of UAE telecom are ridiculous. Unfortunately we cannot do anything about it. Instead of protecting consumers interest TRA was formed to protect Etisalat’s revenues.
I believe Etisalat makes around AED1.5 billion per quarter in profits. Introduction of DU has done nothing.
Nothing will change. All that will happen is Etisilat and DU will sit down together and agree a price for all their broadband prices and charges. This changes 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’.
Businesses in Dubai Media City are basically held hostage to DU in terms of rates and services — it is even worse that the du-opoly outside the freezones because you cannot even switch between DU and Etisalat in Dubai Media City freezone. Here, it is a DU-monopoly.
I think that DU uses the Etislat network so I doubt they would undercut DU’s pricing.
keep dreaming.
Its Incredible, du actually built the infrastructure in the marina and emirats living to provide 100mpbs to subscribers, back in 2002 but due to the lack of competition the prices were set the same as Etisalats and most people are only getting 512 or a 1meg, because they can’t justify spending any more. Also, its odd that over 7 years the prices have not even slightly reduced.
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.
One problem is that many areas are serviced by either one or the other provider, but not both. For example, in Old Town, the only option is to get Du, so even if prices were lowered, many consumers would still not have a choice. I think the only way that’s going to happen is if private telecoms companies are allowed to enter the market.