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Etisalat: ‘Having a competitor is bad for business’

Etisalat: ‘Having a competitor is bad for business’

Companies in this region love to state the obvious. Cue Etisalat, announcing that competing with Du is hurting the bottom line. If only it was benefitting the customer.


November 23, 2010 2:36 by

In a less-than-earth-shattering revelation, Etisalat is reported to have mentioned in its prospectus that “competition from du may cause the group to lose customers.” Aw, poor Etisalat. Must be tough not operating in a closed shop.

Talk about spelling out the obvious, though. Not to mention being a little misleading; competition from Du has already caused the group to lose customers. Etisalat’s Q3 report recorded a drop in profits of Dh.1.2 billion when compared to the same period last year.

Meanwhile Du’s Q3 report boasted a profit of Dh163 million, and in the third quarter of 2010 it added 159,800 new subscribers, a significantly higher rate than Etisalat’s 10,000 new subscribers in the same period. Du Q3 profits were both significantly higher than their previous year (Dh.78.5 million) and analysts’ expectations (Bloomberg predicted a profit of Dh.148 million). Perhaps that prospectus should have read “competition from Du may cause the group to continue to lose customers.”

It’s a pity, then, that all this “competition” hasn’t led to a stellar telco industry in the UAE. In fact, anecdotal evidence tells Kipp that the UAE telco pair is as frustratingly poor as ever. So, in one of our customary fits of annoyance, we asked our readers: What is your biggest complaint about your mobile provider?

The majority (36 percent) said it was the high prices the telecoms in the UAE charge. A substantial 20 percent complained about the lack of the range of services provided, with bad customer service (19 percent) following in third place (Kipp would put this top of its complaints pile). And only 8 percent complained about the bad reception.

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