The country’s thriving oil industry has opened doors to foreign workers and expatriates, which make up over three quarters of the population. In 2008, the country’s economy recorded growth of 7.4%, but just one year later was hit by the global banking crisis, sending it into decline. The country returned to growth in 2010 and carried its momentum into 2012, aided by its safe-haven status amid the region’s political and social crisis.
The Telecommunications Regulatory Authority (TRA) is the UAE’s independent industry regulator. Since its launch in 1976, Etisalat has held a monopoly in the market. That changed in 2006 with the emergence of du, which was awarded a 20-year concession to operate fixed-line, wireless, internet and international telecoms services.
In 2007, TRA revealed that it was drafting a legislation that would open up the market, including the licensing of a third mobile operator, while confirming that the plan will not involve foreign investment. Such a development is not expected in the short term. In 2012, the regulator issued a statement, quashing speculation that it will be licensing MVNOs in the country. “The TRA sees no need to add a new operator to the UAE market at this time; hence it has no immediate intention to do so,” said its deputy director general Majed Al Mesmar.
In September last year, the TRA reaffirmed its position on voice over internet protocol (VOIP) telephony services, stating that only Etisalat and du are permitted to offer VoIP calls.
Responding to reports suggesting that internet telephony services such as Skype and Viber were being blocked in the country, the regulator added that the services were not licensed to operate and there are no plans to do so. The market has shown signs of liberalisation, in particular with the introduction of prepaid mobile packages which do not require prior approval from TRA in 2013, and mobile number portability (MNP) which launched in early 2014.
In June 2014, as part of the Smart Government initiative, a group of nine UAE banks launched the country’s Mobile Wallet project. The service is expected to be available to end users in 2015, and residents will be able to pay for over 90 government services via their mobile phones.
The project will also facilitate smartphones and other digital devices to be used for cashless purchasing in retail outlets, as well as a way to store and transfer money.
“The Mobile Wallet supports a critical national goal. The UAE will be potentially the first country in the world where the whole banking sector supports such a programme, which will impact everyone’s daily lives in one way or another,” said Abdul Aziz Al Ghurair, UAE Banks Federation (UBF) chairman.
Amid rising competition in its domestic mobile market, both operators have also begun to focus on the roll-out of even more advanced high-speed mobile broadband services in 2014.
Together with China’s Huawei, du completed a successful LTE-A field trial between the 800MHz and 1800MHz frequency bands in August 2014. Etisalat also announced a partnership with Alcatel-Lucent to deploy LTE-A technology, which it claims will be a first for the region. Under the agreement, the vendor will increase network speed, capacity and quality, while giving Etisalat the ability to support service in smaller coverage areas, with lower power consumption and greater efficiency.
Also last year, Etisalat invested around $680 million (AED 2.5 billion) on the deployment of LTE networks and fibre-optic infrastructure. The company added approximately 2,500 3G and 4G base stations in 2014, taking its total to 19,000 which it plans to increase to 22,000 by the end of 2015. In October, Etisalat signed a memorandum of understanding with Huawei, covering areas such as public cloud, software-defined networking (SDN) and network function virtualisation (NFV) technologies.
“By teaming up with Huawei, we are looking to explore possibilities of deploying advanced technologies that provide advanced value-added services and ultimately improve our customer’s overall experience,” said Saeed Al Zarouni, senior vice president for business planning and technology evolution at Etisalat.
