The proposed telecom infrastructure sharing in the UAE will increase competition in the sector next year, analysts have said.
UAE newspaper The National reports that the third quarter should still show a positive performance for the country's two operators, but analysts say the mooted sharing of infrastructure makes the future a little harder to predict.
Matthew Reed, practice leader for the Middle East and Africa at Ovum, believes the first phase will allow for competition between du and Etisalat in fixed voice and fixed broadband access. Competition in triple-play services – fixed voice, fixed broadband and TV – will follow in a second phase.
Under the current setup, consumers are led by their location on whether to use either Etisalat or du for home and fixed-line services. The new arrangement, likely to be in place by the end of the year, will give them a choice between the two operators.
According to analysts, this could result in increased profitability as the operators are able to build more efficient business models.
Du, which currently has its infrastructure limited to new developments in Dubai, is expected to benefit more than Etisalat.
Karim Riad, a telecoms analyst at Cairo-based Beltone, said the telecoms sector is highly penetrated, with mobile penetration rates close to 180 per cent. He said he expects further growth to come from the mobile data segment going forward.
However, according to a research note from the UAE brokerage Naeem, du's market share growth is anticipated to slow down "because of intense competition from Etisalat and two-fold market penetration."