2010 United Arab Emirates - Telecoms, Mobile and Broadband

Despite the UAE being one of the most advanced markets in the Middle East, it is the least liberalised with only two operators across all sectors and no foreign investment. All other countries in the region have allowed operators from the region or further afield to buy (or in the case of Lebanon, operate) second and/or third mobile licences and, in some cases, fixed-line and Internet provision licences but the UAE market is served by only two operators, both of them operating in all sectors and both of them majority government-owned.

That said, second operator du, launched in 2007, has gained ground despite inter-connection difficulties and no number portability and now has over 30% of the mobile market. It is helped by the UAE’s very high expatriate population (around 80% of the total), which provides a pool of constantly changing potential new subscribers. Competition in the fixed-line and broadband markets is likely to increase in the near future as Etisalat and du have agreed to share their networks. They completed the technical and operational details of the network sharing arrangements in July 2010 and commercial launch of services is expected after testing of the network and systems interfaces.

This fluid expatriate population may also be a factor in the UAE’s very high mobile penetration rate, of over 200%. All countries in the GCC have extremely high penetration levels but those of the UAE are the highest of all. Much of this is due to multi-SIM ownership to take advantage of various offers and deals.

Incumbent telco Etisalat is rolling out a national Fibre to the Home network (FttH). By end-2009 Etisalat had completed the FttH roll-out for 85% of households in Abu Dhabi, claiming that the UAE’s capital would be the first in the world to be covered by fibre. Completion of the entire national network is expected by 2011. du’s fixed-line and broadband Internet services, together with TV, are provided over its FttH network, which serves new developments in Dubai. Etisalat launched its ‘eLife Triple Play’ services in May 2010, combining fixed line, broadband and TV. du offered a similar service branded ‘Home plus’.

Internet penetration rates are higher than most countries in the region, with Internet subscriber penetration around 30%. Despite this, the UAE still has a surprisingly high number of dial-up subscribers, in 2009 constituting over 50% of all Internet subscribers. This compares with Qatar and Bahrain where nearly all subscribers now use broadband. This is likely to change rapidly as homes are connected to the FttH network.

Government policies over many years have given great encouragement to increase levels of ICT development. Many of the region’s major digital media companies are based in the UAE, particularly in Dubai. These include Tejari, a major portal for all Business-to-Business e-commerce transactions. Both federal and emirate governments have invested considerable sums in e-government.

In addition, around 25% of the region’s burgeoning Free-to-Air and pay DTH satellite TV channels are based in the UAE. While most of the TV in the Middle East is FTA DTH and is pan-regional in production and availability, the UAE has higher pay-TV subscriber numbers than most other countries in the region due to a ban on ‘unsightly’ satellite dishes in many areas. Subscribers access either the cable network of Etisalat’s subsidiary e-vision or the IPTV offered by du and also increasingly by Etisalat.

Market highlights:

• Etisalat is investing in an FttH network. Etisalat has completed the FttH roll out for 85% of households in Abu Dhabi, claiming that the UAE’s capital will be the first in the world to be covered by fibre, and completion of the entire national network is expected by 2011.
• The UAE has sky-high mobile penetration of over 200%.
• Etisalat is a major international player, with operations in 17 countries outside its home market, in Africa, Asia and elsewhere in the Middle East.
• A ban of VoIP services is a very contentious issue.

Estimated market penetration rates in the UAE’s telecoms sector – end 2010

Data in this report is the latest available at the time of preparation and may not be for the current year.