United Arab Emirates - PM Communications

UAE 3rd NOVEMBER 2007 TELECOMMUNICATIONS / 15TELECOMMUNICATIONSALMOST 6 MILLIONMOBILE SUBSCRIBERSThe UAE has the highest mobile phone rate ofpenetration both regionally and internationallyWith just under 6 million subscribers,themobile phone services penetration ratein the UAE exceeds 140 per cent of the population.UAE residents spend more per headon telecommunications than anywhere elsein the region. Many have adopted the trendof subscribing to multiple mobile lines,and inaddition many foreign visitors subscribe to prepaidservices,holding on to the SIM cards forfuture visits.The saturation of the market has driven thedominant provider, state majority-ownedEtisalat, to extend its search for business toother countries like Saudi Arabia, Pakistan,Egypt and Afghanistan. However, with the recentarrival of a second operator on the scene,Etisalat will be faced with competition.Until last year, Etisalat was the UAE’s soletelecommunications service provider. Thatchanged when the government began to openup the sector in line with the UAE’s commitmentsto the World Trade Organisation,which requires full liberalisation by 2015.A second national provider, the EmiratesIntegrated Telecommunications Company,trading under the name “du”,was licensed bythe recently established TelecommunicationsRegulatory Authority and started operatingin February this year.The government recently announced thatit would not be opening up the sector to foreignplayers in the near future, saying it expectedtariffs to become competitive nowthat Etisalat’s monopoly had ended.“We feelthe existing number of telecom companies isenough at present,” Sultan Bin Saeed AlMansoori, Minister of Government SectorDevelopment, told Gulf News.Etisalat rang up net profits of Dh3.7 billion(£496 million) in the first half of this year, a33 per cent increase compared to first halfof 2006.Mohammad Hassan Omran,the company’sChairman,says the results demonstratethe company's diverse capabilities and competitivestrengths.“We achieved financial resultsexceeding expectations and continue toachieve strong results supporting our continuedleadership in the region’s telecommunicationsindustry.”Etisalat’s rival du,which like Etisalat is partlygovernment owned,is expected to spendDh4.7 billion (£631 million) over threeyears on its mobile and fixed line servicesto secure 30 per cent of the UAE market.A report by investment bank EFG-HermesEtisalat saw a 33 per cent increase innet profits in the first half of the yearsays du can build a significant market share,taking advantage of the UAE’s fast growingpopulation and the high level of per capitaspending on telecommunications. It predictsthat du will sign up 569,000 active subscribersthis year, taking 57 per cent fromEtisalat. ●Bringing the worldwithin its orbitWith the launch of its third satellite, ThurayaSatellite Telecommunications Company isextending its coverage to the Asia-Pacific regionhe UAE lives on telecom-and likes to“Tmunicationsdo so using wireless technology,”observes Yousuf Al Sayed, CEOof Thuraya SatelliteTelecommunications Company.And not just the UAE, as Mr AlSayed is in a better position thanmost to appreciate. For the AbuDhabi-based firm boasts theworld’s largest subscriber basefor satellite mobile phones,comprisingmore than a quarter of amillion people across the globe.Thuraya's satellite network extendsto more than 110 countriesin Europe, Africa,the Middle East,and Centraland Southern Asia,and by the end of the yearwill have been extended to the 21-countryAsia-Pacific region, following the launch thismonth of the company’s third satellite.Circling 22,236 miles above the earth, at 44degrees east longitude, five metric tons oftechnology will provide coverage to an areaextending from the East of India all the wayto Japan.“With that development, our coveragewill encapsulate about two thirds ofthe world’s population,” says Mr Sayed.Thuraya was founded by an investor consortiummade up of prominent nationaltelecommunications organisations, financialYOUSUF AL SAYEDCEO of ThurayaSatelliteTelecommunicationsCompanyhouses and investment companies,including Etisalat and AbuDhabi Investment Company. Itlaunched its mobile satellitetelecommunication system inOctober 2000, thus providingblanket-to-blanket coverage tomore than 110 countries inEurope,North and Central Africaand large parts of SouthernAfrica, the Middle East, Centraland South Asia.A second mobilesatellite was launched in 2003.The launch of the third satelliteis part of Thuraya’s push todouble its market size withinthree years by bringing countries such asChina, Japan, Korea, Malaysia, Vietnam,Indonesia, the Philippines and Australia intoits orbit. The company last year opened apermanent office in Singapore as part of theextension of its services into the region.“Thuraya is not really aimed at the UAE,which is geographically well covered by GSM,”says Mr Al Sayed. “Our market is in countriesthat do not have a developed telecommunicationsinfrastructure, or that are solarge that it is not cost effective to providetelecom infrastructure or GSM to cover thewhole territory, and where satellite coverageis the solution.”Subscribers access Thuraya’s mobile satellitesystem through service providers whoare either national GSM network companiesor local telecom operators. Thuraya’s specialdual-mode satellite/SGSM handsets en-able users to switch to satellite transmissionwhenever they are out of range of terrestrialGSM networks.“Thuraya is unique and differentiated fromother satellite service providers because weare closer to GSM than satellite.The differenceis that we use satellite infrastructure,”says Mr Al Sayed.In connection with the latest satellite,serviceprovider agreements have already beensigned in Australia and South Korea,and withBeijing-based China Satellite CommunicationsGlobal – a deal that Mr Al Sayed describesas “a big breakthrough for us.“ Agreementswith companies in other targeted countrieswill be signed by the end of the year.Meanwhile, negotiations for a fourth satelliteare under way with Boeing SatelliteSystems, which has built the other threesatellites.Earlier this year,Thuraya launched ThurayaSG-2520, the smallest and lightest satellitephone, which it is calling the world’s firstsatellite smartphone.The SG-2520 offers advancedvoice, data, fax and SMS. Users areable to download and upload informationfrom the internet in either the satellite orthe GSM mode. Thuraya handsets also havea built-in GPS worldwide radio-navigationsystem, which can prove a lifesaver in remoteareas.Under an agreement signed with Al JazeeraChannel, Thuraya subscribers are providedwith the latest breaking, political, business,and sports news through Short MessagingService (SMS).“We are focusing on our core business,which is voice and data,” Mr Al Sayed says.“We want to bring in new services, to innovate,especially in terms of tracking systemsfor fleet management, and to enter into themaritime business in a strong way along thecommercial routes from Japan, Singapore,Dubai, and Jeddah all the way to the UK andAmsterdam.Those are important routes forus,and for which we are developing the necessaryhardware and services.” ●