The activity of communication in the emirate is remarkably advancing in terms of technology. It is characterised by its speediness in introducing advanced and modern technologies in networks, domestic and international services, telephones, Internet and private internal circuits.

The value added in transport, storage and communications has seen a remarkable increase during the period 2004-2009, as it went up from Dh20.1 billion in 2004 to Dh38.8 billion in 2009, with an annual growth rate of 14.1 per cent on average during the period. The value added in the activity has grown by 6 per cent in 2009. Post and telecommunications, acquired largest share of 61 per cent out of the total value added in transport, storage and communications activity in 2009.
With regard land transport, value added in this sub-activity, had increased from AED 4.4 billion in 2005 to Dh7.2 billion in 2009, with an annual growth rate of 13.2 per cent on average. The value added in water transport increased as well, from Dh1.4 billion in 2005 to Dh2.2 billion in 2009; while the value added in air transport, went up from Dh1.1 billion in 2005 to Dh1.8 billion in 2009. The value added in supporting and aiding activities and travel agencies had also risen from Dh2.3 billion in 2005 to Dh3.7 billion in 2009. Value added in activities of post and telecommunications grew from Dh14.5 billion in 2005 to Dh23.8 billion in 2009.

Gross fixed capital formation in the activity of transport, storage and communication had remarkably developed during the period (2004-2009), where the value went up from Dh5.2 billion in 2004 to Dh9.4 billion in 2009, with 12.6 per cent average annual growth rate. This rise was attributable to increase in the volume of allocations spent on modernisation and development of this activity during that period.
 

 

Greater competition in the UAE’s telecommunications industry is expected to usher in an era of increased choice and lower prices for consumers of fixed-line telecoms services, particularly high-speed broadband.

The Telecommunications Regulatory Authority (TRA) recently confirmed that Etisalat and du, the UAE’s two telecoms operators, are going to share each other’s internet and television networks, placing the rivals in direct competition.

Industry experts and consumers are looking forward to the showdown, which is expected to start in the next few months, barring any technical delays.

“The parties have now concluded the negotiations on complex technical and operational details of the network-sharing arrangements, and are currently in the process of undertaking comprehensive testing of the networks and systems interfaces,” said Mohammed Al Ghanim, the director-general of the TRA.

Until the process begins, Etisalat will continue to hold its current monopoly on fixed-line telephone, internet and cable TV services throughout Abu Dhabi and most of the UAE. “Users will be able to access services from both operators once these [network- sharing arrangements] are commercially launched in the coming months,” Al Ghanim said.

For consumers this is, of course, welcome news. After all, network sharing will mean more choice, while more intense rivalry between the two telecoms players is likely to bring down prices.

In fact, both operators have already indicated that they will introduce special promotions on broadband services, including temporary price cuts and bundled deals, a competitive process which it is hoped will encourage greater internet use in Abu Dhabi and the UAE.

The two operators are unlikely to change things too rapidly, however, preferring instead to see how the deal plays out before making longer-term decisions. “The first couple of weeks will create a dynamic in the market and we have to understand this dynamic before we do anything else,” Farid Faraidooni, the chief commercial officer for du, told Abu Dhabi daily The National.

Greater connectivity is seen as a key area of development by policymakers. As outlined in the Abu Dhabi Economic Vision 2030 released by the Department of Economic Development, the government plans to make information and communication technologies (ICT) an integral part of the emirate’s development.

While Abu Dhabi and the UAE in general have made progress on increasing internet access and bringing down prices – broadband speeds of less than 1 MB are the cheapest in the GCC – the costs are still high compared to other countries. In Turkey, internet prices for this speed are 72% lower, according to a Federal National Council study released earlier this year.

High-speed internet access is important to homes, but it is even more essential for businesses and commerce. News of increased competition in the sector means many companies in Abu Dhabi, and the wider UAE, will be hoping to see a reduction in their internet costs in the near future.

Businesses and commercial users in the UAE face higher prices than their counterparts abroad, with the cost of broadband at speeds of 1-4 MB some 91% lower in Morocco. In Europe, meanwhile, they are on average over 95% lower.

 

The network-sharing deal should bring faster internet to a number of local firms, with the Abu Dhabi government likely hoping this will boost economic activity. A 2009 report from the World Bank found that a 10% increase in high-speed internet connections can boost a developing country’s economic growth by up to 1.3%.

Future competition will most likely take place across mobile, satellite, broadband and fixed-line telecoms markets. On the regulatory side, the TRA is likely to need to continue evolutionary moves such as the network-sharing deal to meet the increasing demands of the technology savvy population.