Setback for Etisalat and du network-sharing plan

The fixed-line sharing initiative, announced last year, had already faced several delays. Philip Cheung / The National

A plan to allow Etisalat and du to compete freely on landline and broadband packages has been postponed.

Ringing the changes:Discover what the UAE telecoms have planned

Etisalat Learn more

Du Learn more

Lower consumer prices were expected under an initiative to allow subscribers to choose between operators when selecting landline, broadband and television services.

The fixed-line sharing initiative, announced last year, had already faced several delays, with the latest deadline set for this month.

That time frame will no longer be met, the Telecommunications Regulatory Authority (TRA) said.

"The full commercial launch has been postponed until the completion of the technical readiness," the TRA said yesterday.

Etisalat and du started testing the system on July 14 but are still not ready for a full commercial launch, the TRA said.

"The TRA will continue to oversee the development of work […] before the full commercial launch," it added.

Etisalat and du are restricted to offering fixed-line services in certain areas. But the sharing of infrastructure promised to herald a new era of rivalry between the two operators.

Commentators said the scheme was likely to bring lower prices for UAE telecoms services, which are high compared with many other markets.

"It is possible that this increased competition could lead to price cuts by both operators, so it is disappointing for customers in the short term that this is going to be delayed," said Dino Wilkinson, a communications specialist and partner at the law firm Norton Rose Middle East.

Mr Wilkinson said both telecoms operators stood to gain from the move.

"There are a number of well-established benefits that can be obtained through network sharing. These include the reduction in both capital and operational expenditure, speeding up network rollouts and improving an operator's coverage and service," he said.

"On the back of its recently announced losses, the cost efficiencies could be of particular benefit to Etisalat. Du, on the other hand, will hope that sharing of the telecommunications infrastructure will level the playing field and allow it to compete more easily with Etisalat," Mr Wilkinson said

Du said it was working with the TRA on continued testing of fixed-line sharing. "Both operators are working hard to ensure seamless testing and closure of all technical aspects," the operator said. "The commercial launch date will be decided and communicated by the TRA accordingly."

Philip Brazeau, who heads the telecoms practice at the Middle East law firm Al Tamimi, said the TRA needed to be firm in encouraging the launch of the service.

"The length of the [delay] seems to suggest there's some reluctance on the part of service providers to actually share networks," he said. "In situations like that, it's incumbent upon the regulator to take a firm hand in making it happen."

Mr Brazeau agreed that fixed-line sharing could bring lower prices. But the pressure on prices will be limited because there are only two operators in the market, he said.

Etisalat and du already compete freely for mobile subscribers and are approaching parity in market share.

Du has a total share of the mobile-subscriber market of about 46 per cent, and a company official said it expected to overtake Etisalat next year.

To cater for more mobile subscribers, du yesterday said it had launched a new number prefix to its mobile-phone lines.

Du said it would offer mobile-phone lines with the prefix 052, in addition to existing numbers beginning 055. In the first phase of the 052 rollout, the company will be able to offer 1 million new lines.

twitter: Follow our breaking business news and retweet to your followers. Follow us