Etisalat likely to offer internet calls by Q2 end
Dubai, April 19, 2012
UAE telecoms operator Etisalat will offer internet-based phone calls by the end of the second quarter, a top executive told Reuters, as the former monopoly tries to fight off competition from Skype and other international providers.
In the UAE, only Etisalat and rival du are licenced for Voice over Internet Protocol (VoIP) services - free Internet-to-Internet calls and cheap Internet-to-phone calls - and both have yet to do so as they try to maximise earnings from conventional calls.
Global market leader Skype is among the foreign VoIP providers officially banned as the government tries to thwart outside competition for the two domestic operators, both of which are majority-owned by state-controlled institutions.
In reality, that ban has done little to stop VoIP's soaring use among the UAE's population, four-fifths of whom are foreign, with wealthier residents using the service on smart phones or lap-tops, while blue-collar workers flock to internet shops to call home for a fraction of the cost of conventional tariffs.
In October, Etisalat unveiled plans to offer VoIP as part of its ePlus mobile platform that will likely include social networking, internet browsing and instant messaging, but six months later its customers are still waiting.
Essa Haddad, Etisalat's chief commercial officer, said: 'We are talking about quarter two, 2012', when Reuters asked when the company would launch international VoIP services.
Haddad declined to indicate how much cheaper Etisalat's VoIP calls would be compared with its usual international tariffs.
'Any price change has to be (approved) by the regulator and that's why it's taking time because we need to get this finalised,' he told Reuters.
Previously, the telecoms regulator has indicated it would not allow significantly cheaper VoIP tariffs, but analysts warn that will do little to persuade UAE residents to switch from the likes of Skype, which can still often be accessed locally despite the ban.
Faced with this challenge, Etisalat has bet its ePlus platform will improve customer loyalty and stem the flow of subscribers to du, which has built up an estimated 46 percent share of mobile subscribers since launching services in 2007.
Etisalat, which operates in 17 markets, has reported declining earnings in seven of the past eight quarters, with the rise of du and VoIP key factors in this slump.
The firm derived 74 percent of its revenue and 97 percent of net profit from the UAE in 2011, according to a presentation to analysts. - Reuters