Region's internet costs tied to average income

Internet users in the UAE pay more than three times what they would pay in Egypt, according to a new report.

Young men surf the net at a cafe in Abu Dhabi: a study has found that in wealthier Middle East countries, users are charged more for internet access.

Internet prices in the Middle East are strongly correlated to average incomes, a new study shows, with customers in the GCC paying more than triple the rates enjoyed by those in Egypt, which has the region's cheapest internet. But before feeling too overcharged, local internet users should spare a thought for those in Mauritania, where one year of basic internet access costs more than an average year's salary. A year of similar access in the UAE would cost about Dh2,442 (US$665) - just 1.6 per cent of average annual income. It places the country roughly in the middle of the pricing spectrum for the region, which ranges from $194 in Egypt to more than 10 times that in war-torn Iraq. "Generally speaking, prices in the region are going down, due to competition and different degrees of liberalisation," said Hussam Barhoush, a senior analyst at the Arab Advisors Group in Jordan, which prepared the report. "But in higher-income countries like the UAE, providers do not have to lower the prices by as much to stimulate demand." Despite falling prices in recent years, internet access in the Middle East remains expensive compared with international markets. In countries such as Hungary, Belgium and Singapore, prices are roughly a quarter the regional average. Regulatory moves to increase competition and give more freedom to new operators will help push prices down and raise the number of internet users, Mr Barhoush said. The UAE's Telecommunications Regulatory Authority (TRA) has said that it is in the process of preparing a framework for the licensing of new companies, with many in the industry saying the market for internet service providers will be one of the first to see greater competition. More than half the UAE internet users responding to a 2008 survey said they felt unsatisfied with the value for money of their connections. Regardless, an increasing number are turning to mobile broadband connections, which while more expensive offer greater convenience. Usage of the internet service on Etisalat's mobile network rose by more than 50 per cent last year. It is expected that any new competitor will be a service-based operation, meaning it will use the physical network infrastructure already rolled out by Etisalat and du. Such operators make sense in markets such as the UAE where physical networks already reach the majority of the population, Mr Barhoush said. [e-mail]