Etisalat cuts iPhone prices

The cost of handsets and monthly contract plans have been reduced by up to 25 per cent.

Customers who have signed up for an Apple iPhone since its launch in February can expect a pleasant surprise on their next monthly bill: a price reduction of up to 22 per cent. Etisalat said yesterday it had cut the price of the iPhone and the monthly plans linked to the device, a month after saying it had requested approval for a price reduction from the Telecommunications Regulatory Authority (TRA). The company confirmed that the price reduction would apply not just to new customers, but to those who signed up for 12-month contracts at the higher prices. The reductions could mean more than Dh1,000 (US$272) of savings for customers who chose a 12-month deal on Etisalat's top-of-the-line monthly plan, priced at Dh643 in February. The monthly fee has been reduced to Dh499. The price cuts come in the lead-up to the launch of a new version of the iPhone's operating system next month, which is widely expected to be accompanied by the release of a new iPhone handset. New features, such as the ability to record video clips and send multimedia messages - which the iPhone has long been criticised for lacking - as well as rumours of a simplified, low-cost handset, have led to some customers holding off on purchases of new iPhones. Despite significant price cuts, Etisalat's prices remain at the high end of the more than 100 mobile operators around the world that offer the device. The cost of the handset alone, sold on a prepaid plan, is Dh330 higher than the price charged by Etisalat's Saudi Arabian network, Mobily. Early last month, Mohammed al Qamzi, the chief executive of Etisalat, said the company hoped to lower the price of the iPhone and its monthly plans, but was awaiting approval from the TRA. The regulator replied, saying the company had approval to sell the device at the price charged to the company by its manufacturer, Apple. The two telecoms companies must submit all pricing schemes for approval by the regulator, which has been keen to avoid a price war emerging between the deep-pocketed Etisalat and its newer competitor, du. Etisalat has recently called for more intense price competition to be allowed by the TRA, as du becomes increasingly popular and profitable. Last week, Etisalat submitted a report of its internal cost structure to the TRA, which will allow the regulator to determine its "cost price" when considering new pricing plans. The TRA said it was "premature" to declare whether the report met its expectations. [e-mail]