Etisalat cuts internet prices

The eLife service is the first offering from Etisalat that takes advantage of the company's fibre-to-the-home network.

Etisalat, the UAE's largest telecommunications operator, has cut the prices of its high-speed internet by up to 40 per cent as it launches its fibre-optic network to Abu Dhabi with a new service offering. The eLife service is the first offering from Etisalat that takes advantage of the company's rollout of its Dh5 billion (US$1.36bn) fibre-to-the-home (FTTH) network, which offers improved access to online services and applications.

For broadband speeds of 30 megabits per second, the company's fastest offering, Etisalat has cut its price to Dh 499 a month from Dh699. The move brings UAE broadband prices in line with similar offerings in Australia and Europe, data from the Organisation for Economic Co-operation and Development show. The announcement was viewed positively by analysts. Simon Simonian, the telecoms analyst for Shuaa Capital, called the decrease "good news" and expects further declines in the next year.

"For the expat coming from Europe or North America, prices in the UAE appear high, but it reflects that there is more adoption and that we're in the early stages of the adoption curve," Mr Simonian said. Marc Biosca, the head of the telecoms practice for the management consultancy AT Kearney in the Middle East, said he expected Etisalat's offer to improve broadband affordability and accelerate the migration to broadband connections from slower dial-up for customers seeking easier access to the internet.

"This new offer will address the increasing demand for more bandwidth from large consumer segments increasingly using more data-intensive services, or applications such as video streaming, photo sharing or large files exchange," Mr Biosca said. Essa al Haddad, the group chief marketing officer for Etisalat, called the new network a major landmark in the company's history. Nearly all of Abu Dhabi, or about 200,000 households, is connected to Etisalat's FTTH network, with the remainder to be completed by the end of the year, an Etisalat spokesman said.

About 60 per cent, or 670,000 households, in the UAE are also connected to the fibre-optic service, with the rest of the country expected to be completed by 2011. Along with broadband internet, customers will also receive a landline telephone connection and several hours of internet wireless connection at an Etisalat hotspot zone. An interactive television service will be added to the package early next year, although the company did not provide pricing details for the additional offering.

In a recent study of global broadband prices by the Said Business School of Oxford University, the UAE ranked among the 25 per cent most expensive nations of the 42 studied. Prices in the Emirates were higher than neighbours Bahrain, Qatar and Saudi Arabia, as well as developing countries including Egypt and Tunisia. [e-mail]