Network sharing in the UAE, which will allow customers to choose their preferred telecom operator, is facing delays because telcos have yet to agree on commercial terms for the arrangement, the country's regulator said on Monday.

Former monopoly Etisalat and rival du both offer fixed-line voice, broadband and television services but not in the same districts.

An agreement between the pair to allow open competition by using each other's infrastructure was slated to be completed by the end of 2011 but is now delayed to the third quarter of 2012.

"By April 30, I'm comfortable we will have full technical and operational readiness, but I'm not comfortable we will have commercial readiness by that date," Fintan Healy, executive director for regulatory affairs at the Telecommunications Regulatory Authority, told reporters on the sidelines of a conference.

"We don't regulate retail prices per se, we regulate wholesale prices so we're working on a fair wholesale price - the price Etisalat charges du and vice versa."     

Healy said the regulator hoped to have the matter resolved in two to three months. The main issue centered on reaching an agreed price for the provision of television services.

"If it's the second quarter it will be right towards the end of the quarter, so we may well be just into the third quarter."     

As the former monopoly, Etisalat has the greater fixed line infrastructure, with du's fixed line customers largely restricted to the newer areas of Dubai. The two operators are finding it hardest to agree a price to allow competition in the provision of television services, Healy said.

An infrastructure sharing deal is likely to ratchet up the commercial pressure on Etisalat, which reported a 3 percent drop in domestic revenue in 2011 along with shrinking margins.

Etisalat, with its broader network, potentially has more to lose from opening up home services to competition, spurring it to revamp its TV platform.

"TV is a sticky product," said Matthew Willsher, Etisalat's  chief marketing officer. "Having a really good TV service is competitively important so it's a real focus for us." - Reuters