Telecom
Abu Dhabi and the other emirates are making significant investments in upgrading their transport, telecommunications and information-technology infrastructure, creating new opportunities for investors.
Major new projects keeping pace with population growth
Sultan Bin Saeed Al Mansoori, Minister of Governmental Sector Development for the United Arab Emirates
As Sultan Bin Saeed Al Mansoori, Minister of Governmental Sector Development for the United Arab Emirates, points out, “It is characteristic of our leaders to go for the best in everything.” Partnerships between the public and private sectors are being sought to keep infrastructure development on track.
USD 100 billion earmarked for infrastructure projects
In Abu Dhabi, which anticipates significant population growth, more than USD 100 billion will be invested over the next four to five years on infrastructure projects. Plans include a new airport, a new world-scale port and industrial zone in Taweelah, another port and industrial zone at Mussafah, the 11,000-unit Showayba City at Mussaffah, Mohammed bin Zayed City and the completion of several projects at Shahama, Khalifa Cities A and B.
Abu Dhabi’s transport infrastructure is being improved through new road and bridge networks and major redevelopment of the road network on Abu Dhabi Island, including the Corniche and internal roads. Meanwhile, work continues on the USD 245 million Abu Dhabi ‘third crossing’ project, the third link between Abu Dhabi and the mainland. The emirate’s public transport system is being expanded and a new subway line may eventually link with Dubai Light Rail to ensure smooth connections between the two neighboring emirates.
Telecommunications Regulatory Authority
“The TRA makes decisions pro-competition rather than pro-competitor.”
The UAE Telecommunications Regulatory Authority (TRA), an independent regulatory body established three years ago, is promoting fair competition and adapting to a fast-changing market. Mohamed N. Al Ghanim, TRA Board Member & Director General, explains, “Americans should know that we are a truly independent organization that ensures fair regulation of the local telecommunications sector.”
The TRA was created to ensure that the UAE telecom sector, recently opened to competition, is fair and transparent. The UAE already has state-of-the-art telecom infrastructure with a mobile penetration of around 140 percent and fixed-line penetration of around 70 percent, as well as an established presence of one of its operators in several international markets. As Al Ghanim points out, “The quality of service is already extremely high in the UAE, and, along with all these challenges, the second operator, is also faced with full-service license, which means mobile fixed Internet; where the two licensed UAE telecom operators are Etisalat and Du.”
Ensuring a level playing field
The TRA’s responsibility is to make sure that all licensed operators that enter the market in the future can count on a level playing field in the UAE. It develops telecommunication policies, procedures and guidelines and has the power to enforce them, and assists operators in negotiations with existing telecom operators to share their infrastructure. Most importantly, the TRA has established a very transparent dispute-resolution procedure. “The TRA makes decisions pro-competition rather than pro-competitor, unlike some other regulatory agencies,” Al Ghanim says. He adds, “We are very strict about making sure that any operator that is dominant in any field does not play with prices.”
The TRA has developed a strategic plan for the next five years that focuses on keeping pace with the rapidly evolving global telecommunications sector. “We are racing against time. If we are late, our sector is late. If we are fast, we build the sector with us,” Al Ghanim explains. The TRA sense of corporate responsibility is shown in the organization’s efforts to make sure that all UAE residents have access to modern telecommunications services while also ensuring that the country’s natural environment is protected. The TRA recently launched a program to recycle mobile telephones as one of its efforts to protect the environment.
High-potential partnerships
American companies looking to enter the market should consider partnerships. The American company Symantec recently established a long-term partnership with the UAE government, and Al Ghanim says the UAE welcomes more partnerships like this. He adds, “I went to Silicon Valley and met with a lot of firms to see how we can establish partnerships and research centers in the UAE. We have very strong alliances with the United States in terms of harmonization and implementing the best regulations in the world, and we want to have more partnerships with American companies in the future.”
Since the UAE telecommunications sector is the second-biggest telecom sector in the Arab world, partnerships with local telecom and ICT firms have excellent growth potential.
Working with the International Telecommunication Union (ITU), the TRA strives to promote modernization and harmonization throughout the region. For investors in the UAE, “We increase investor confidence by showing that they can count on us to be independent, have all the right policies, enable competition, and be transparent,” Al Ghanim concludes, noting that he wants the TRA to be a strong brand name in the future.
Du
“Just by introducing competition, we have changed the name of the game.”
Osman Sultan, CEO
Entering a market that already had a very high level of telecommunications services as well as high penetration is never easy. As Osman Sultan, du’s CEO, puts it, “The need for du to differentiate itself in such an over-saturated market resulted in a differentiated approach to our brand’s pricing, products and services. For example, we are the only operator to offer 2G and 3G at launch.”
The results are for everyone to see. du – the UAE’s new telecom operator has set a scorching growth rate ever since the launch of its services in February 2007. du reported AED 412 million in revenues for the third quarter of 2007, and its innovative products and service offerings continue to attract new customers.
Osman Sultan points out that du is doing even better than anticipated. He says, “du’s strategy of proactively launching new services and products resulted in signing up even more than our first million subscribers representing 22 percent of the United Arab Emirates’ population in just 9 months of operation.” du is continuing to expand and optimize its mobile network and increase the number of du shops and dealers to provide more convenience for its clientele. “We are proud of the trust placed in us by our customers,” Sultan says.
The company has a very solid financial backing. The government of the United Arab Emirates has a 40 percent stake in du, while Mubadala Development Company, TECOM Investments and public shareholders each hold a 20 percent stake. du partners with Cisco and Tecom, and is traded on the Dubai Financial Market.
Some of the key competitive advantages that really sets du apart include its world-class 3G network and its innovative services (all ‘firsts’ for the local market), such as per-second billing, a mobile payments system, tailored solutions for consumer and enterprise segments, online account management, a unified bill for all services, an e-shop, WoW recharge card – offering customers choice of more credit or more time, and mobile TV services. du launched its Call Select fixed lines services nationwide in July 2007, only 5 months after the start of its operations.
Good corporate governance means a lot for du. du has distinguished itself as a good corporate citizen by establishing a clear strategy and outlining a detailed program with the aim of contributing to the enrichment of the UAE society, while celebrating its heritage and diversity. du has focused on supporting several initiatives that included education-led activities, culture and heritage programs, a mobile recycling campaign, support and sponsorship of FREEJ, the first UAE 3D-animated show in the Middle East, among many other community-service projects.
Sultan credits du’s success to his dynamic, customer-focused management team. He says, “Our team listens to customers and designs telecom solutions to fit their needs. At the heart of it all are our customers, who have shown faith in du and have encouraged us to keep innovating.”
du has a significant role to play in stimulating the growth of the United Arab Emirates’ information technology and communications sector. As Sultan points out, “Just by introducing competition, we have changed the name of the game. As the market evolves further, consumers will demand more from their telecom service providers. This is where we come in.”
In the future, du plans to provide even more 3G services and new offerings involving a convergence of telecom technologies. Osman believes that the du brand reflects the United Arab Emirates’ commitment to excellence, diversity, cutting-edge services and long-term perspectives. He concludes, “I want people to see us not just as the challenger of today, but as the leader of tomorrow.”
