| Kippreport.com

Moving numbers? Big deal

January 25, 2011 3:18 by Samuel Potter

What’s really eating at Kipp, if we’re honest, is not the media reaction to a slight change in policy, it’s the corresponding announcement that there will be no third telecoms operator in the UAE anytime soon.

At the same conference, Al Ghanim ruled out the possibility of introducing a new operator pretty emphatically: “The market can’t take a third operator,” he said. Zawya helpfully rolled out a telecoms analyst to give us some more insight: “We agree that the mobile market in the U.A.E. is already mature with a SIM penetration of 215%, the world’s highest, indicating that each subscriber has at least two SIMs. There is no room for a third operator at all, especially that mobile tariffs are significantly lower when compared to other highly-penetrated markets,” said Sarah Shabayek at HC Securities.

There is no room for a third operator? Kipp has an idea: Why not let potential third operators decide that for themselves. They will soon work out whether they can make any money or not. And Kipp is betting they would be able to, given the high prices of telecom services ‘enjoyed’ by UAE residents. What would probably be more accurate would be to say: A third operator would mean less cash to go round, meaning a smaller income for the largely government-owned companies. It’s not like it’s a problem – the government is quite within its rights to run the telecoms system how it sees fit. But it seems at the moment we’re more or less pretending to have competition, which is a bit pointless.

Meanwhile the much touted network sharing will “hopefully” happen in 2011, according to Al Ghanim. “Both companies are working hard to solve technical issues,” he said. “Over the next five years, we will focus mainly on broadband because this reflects the national telecoms policy.”

Kipp does believe we’ve just been put on hold.

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