Etisalat is apparently planning to open up its telecommunications network in the United Arab Emirates to its rival du, according to Reuters (News - Alert).
The two carriers have been negotiating over bitstream access, or network sharing, since 2009, but haven’t come up with a deal. An Etisalat (News - Alert) bond prospectus said the company is planning on opening up access by the end of the year.
The former state monopoly still owns 86 percent of the market share in the country providing telephone, cable TV and Internet service, as du does. The UAE government is a majority stakeholder in both Etisalat and du. The latter’s access has been limited to the newer districts of Dubai.
The move comes while the worldwide telecommunications industry is undergoing some big changes. While Etisalat’s Average Revenue Per User (ARPU) last year held steady at Dhs115 ($31.31), the same as in 2012, it was still down from Dhs130 ($35.39) in 2011.
Etisalat has blamed the decline on more users switching to over-the-top VoIP applications such as Skype (News - Alert) rather than using Etisalat’s own services.
“Competition from du has been a less significant factor in the level of xed-line ARPU as du only has xed-line operations in a limited number of regions within the UAE,” Etisalat’s prospectus said.
In turn, du CEO Osman Sultan blamed the lack of fixed wireline competition as the reason his own company wasn’t growing as fast as it could. The company reported a 4.8 percent growth in the Q1 2014.
Wireline telecommunications tend to foster “natural monopolies” simply because running cable is so disruptive and difficult it only makes sense to do it once. Legislative options have been put in place in some jurisdictions to open up networks to competitors in an attempt to make competition between carriers more fair. Etisalat seems to be opening up its network voluntarily, though it remains to be seen if this will actually foster more competition in the UAE telecom space.
Edited by Maurice Nagle