Open up telecoms to competition

Start-ups and consumers stand to benefit if new and different operators are allowed

Men walk past the Etisalat exhibit with Du's exhibit in the background at a careers fair in Dubai (Photo by Jeff Topping/The National)

The news that the country’s two telecom operators will start competing with one another in some more aspects of their businesses is good for consumers. But there is still much to be done.

Etisalat and du have agreed to a deal whereby customers can choose to get their fixed phone line and broadband services from either company. That’s good for competition, although it doesn’t go far enough. As analysts have pointed out, until the TV component is also opened up to competition, many households who go for a triple package will probably stay with whichever company provides their TV services.

From a competition point of view, this newspaper would like to see telecommunications opened up much further. The process began last year when Etisalat and du agreed to let customers “port” their mobile numbers from one provider to the other. But what hasn’t happened yet is the ability of private companies to buy time on the broadband or mobile phone network. The creation of a third operator could also be helpful in opening the market,

It works like this. The basic infrastructure for broadband (all the cables dug under the ground) and for mobile (all those communication towers) has already been built. In some countries, small companies are able to buy time on those networks, package them up and resell them to consumers. The benefit is increased specialisation – a small company might package mobile calls only to Asia or Africa, or a different company might set itself up as a niche internet service provider.Renting time on the broadband network is called bitstreaming, while on a mobile network it is known as mobile virtual network operator licences (MVNO). At the moment, in the GCC, only Oman and Saudi Arabia allow MVNOs, and no countries allow bit­streaming.

But there’s no reason that the Telecommunications Regulatory Authority could not eventually allow such competition. That would be particularly good for the UAE because it would allow small companies and start-ups to enter the market. The telecoms market worldwide is changing and clever companies will be able to disrupt the old technology in ways as yet unimagined. We should encourage that. When a start-up in the region and beyond it looks around, it should see the UAE as the place to base its operations. That will be good for innovation, for competition and, especially, for the customer.