This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/uae-telecommunications-industry-analysis-550 Background of the industry Telecom sector is one of the fastest growing sectors in UAE and the most developed in the entire MENA region. It has the highest penetration levels in the entire region. After the entry of Du Telecom, this market could be seen as a duopoly. With the Telecom reforms, according to the mandate of WTO, set to be completed in 2015, UAE could see an unprecedented growth in both quality of services and competition. With a decent population growth, increasing business enterprises and world-class infrastructure, UAE Telecom market is also a huge contributor to the GDP of UAE. This report analyzes the current situation of the market and its future trends along with discussion about its 2nd operator, Du Telecom. Du Telecom In only 6 years, Du Telecom has captured about 40% of the Mobile Market in UAE. Through its innovative offerings, easy tariffs schedule and impeccable customer service it is becoming a high respected brand name in UAE. Its financial growth in revenues and net profit has been tremendous. A SWOT analysis of the organization talks about its various strengths and weakness along with the kind of opportunities and future threats that Du Telecom might face in its growth journey. Future Trends in UAE Telecom Sector Mobile, mobile data and Broadband services are set to be the flag bearers of the growth of Telecom industry in UAE. Another notable trend that could change the shape of market is the Mobile Number Portability, on which discussions are on between the two operators. Finally, Mobile Virtual Network Operators (MVNOs) entry could stir heavy competition in the UAE Telecom market.

1. Emirates Telecommunications Industry
analysis: Opportunities & Challenges
Case of Du Telecom

2. Table of Contents
Executive Summary.................................................................................................................... 3
1. Introduction & Background of the study ............................................................................. 4
2. UAE Telecom Sector Overview .......................................................................................... 4
3. Du Telecom – A snapshot.................................................................................................... 7
4. SWOT analysis for Du Telecom........................................................................................ 10
5. Future Trends & Growth Drivers for the UAE Telecom Sector........................................ 12
6. References.......................................................................................................................... 13

3. Executive Summary
Background of the industry
Telecom sector is one of the fastest growing sectors in UAE and the most developed in the entire
MENA region. It has the highest penetration levels in the entire region. After the entry of Du
Telecom, this market could be seen as a duopoly. With the Telecom reforms, according to the
mandate of WTO, set to be completed in 2015, UAE could see an unprecedented growth in both
quality of services and competition. With a decent population growth, increasing business
enterprises and world-class infrastructure, UAE Telecom market is also a huge contributor to the
GDP of UAE. This report analyzes the current situation of the market and its future trends along
with discussion about its 2nd
operator, Du Telecom.
Du Telecom
In only 6 years, Du Telecom has captured about 40% of the Mobile Market in UAE. Through its
innovative offerings, easy tariffs schedule and impeccable customer service it is becoming a high
respected brand name in UAE. Its financial growth in revenues and net profit has been
tremendous. A SWOT analysis of the organization talks about its various strengths and weakness
along with the kind of opportunities and future threats that Du Telecom might face in its growth
journey.
Future Trends in UAE Telecom Sector
Mobile, mobile data and Broadband services are set to be the flag bearers of the growth of
Telecom industry in UAE. Another notable trend that could change the shape of market is the
Mobile Number Portability, on which discussions are on between the two operators. Finally,
Mobile Virtual Network Operators (MVNOs) entry could stir heavy competition in the UAE
Telecom market.

4. 1. Introduction & Background of the study
Telecom sector in UAE is one of the most developed and technologically advanced
sectors in UAE. Moreover, it is one of the important sector in economic terms as well
as it contributes about 5% to UAE’s GDP. As far as mobile penetration is concerned,
UAE has one of the highest numbers in the world with 203% of population in 2010
with 10.69 million subscribers(Uaeim.ae, 2012).The growth is also healthy at double
digits and doesn’t show any sign of saturation in the coming years. Also it was the first
country in the Middle East to GSM and 3G services.
This sector has undergone various reforms and after deregulation of the market it has
become highly competitive and has grown significantly (Topnews.ae, 2012). One of
the important steps taken by the UAE government was to establish an independent
Telecommunications Regulatory Authority (TRA) in 2003. TRA has taken several
steps like Information and Communications Technology (ICT) Development fund to
foster the growth of sector. They have also identified areas of growth like mobile
internet and 4G services to continue the momentum of growth in this sector. Moreover,
the broadband sector would continue to grow at about 25%. With technological
advancements like Fiber to home, there is a possibility of providing low cost internet to
all the towns and villages in UAE. According to one of the estimates, internet access
will reach to 70% of the homes by 2013 (Nuqudy, 2012). The Telecom sector holds
great promises for the future as suggested by the expected growth rate of 15% and
further investments of about AED 60 billion.
Emirates Telecommunication Corp (Etisalat) and Du Telecom are the two major
telecom companies in UAE with revenues of AED 71.4 billion and AED 15.9 billion
respectively.Etisalat has witnessed high growth volumes and has also marked several
achievements like GCC Economic Award and Middle East Customer Care award
(Uaeim.ae, 2012). While, Du Telecom is also expanding its market and had over 5
million individual subscribers and 40,000 business subscribers in 2011.
This paper presents an overview of the telecom industry in UAE by reviewing its
current challenges and future opportunities. It also discusses the case of Du Telecom in
detail by undertaking a company level analysis. The paper concludes by summarizing
the findings and giving recommendations for the growth of this sector and Du
Telecom.
2. UAE Telecom Sector Overview
UAE is one of the most forward countries in the Middle East. It’s tremendous growth can be
attributed to several factors like low regulatory burden, access to advanced technology and
infrastructure, reliable public services and others. Also, UAE government is committed to
maintain positive attitudes towards private investment, low tax rates and infrastructure
development. Hence, UAE telecom sector has seen strategic growth as UAE diversifies
economic growth into different sectors(Deloitte, 2010). It can be described as a “duopoly”
characterized by high GDP growth, high penetration and rapid broadband and internet user base

5. growth. The liberalization of the UAE telecom sector started after its accession to WTO and
since then the government is committed to completely liberalize this sector by 2015.
Earlier, UAE telecom market was a monopoly and Etisalat, the state owned operator was the
dominant player. In 2006, this monopoly was broken after Du Telecom was given its license in
2006. Since, then Du telecom has seen tremendous growth and is giving stiff competition to
Etisalat in terms of service offerings and strategic marketing. However, they are still miles apart
in terms of revenue share and network coverage.
UAE Telecom can be mainly divided into two types of services – Mobile services & Fixed line
services. Other types of services are Internet services (Broadband and Mobile) and 3G services.
While in Fixed line services apart from the fixed telephone lines there is a Dial up internet
service.
Mobile Market
As already mentioned, UAE has go the highest penetration rates in the region and one of the
highest in the world. With a lot of expatriates coming in and the population of UAE expected to
grow at 4.8% (5 year CAGR), the mobile subscriber numbers are on the verge of crossing 12
million subscribers. The figure given below shows the trend in subscribers and penetration in
UAE.
Figure: Trends in Mobile Subscriber numbers and Mobile Penetration in UAE
Fixed line Market
Fixed line telephone market in UAE is expected to cross 2 million subscribers by 2013. The
additions are very less and are mainly driven by population growth. The penetration was about
31% in 2010 and is expected to be around that level for the next few years. As far as competition
is concerned, the sector is very segregated with Du essentially serving the new Dubai area while
Etisalat having its operations in the rest of the country. It is very difficult for one operator to
penetrate the other’s territory given the need to install equipment in each other’s’ telephone
exchanges. The figure given below shows the growth trends and penetration in fixed line
telephone market of UAE –

6. Figure: Trends in Fixed line Subscriber numbers and Fixed line Penetration in UAE
Broadband Services
Broadband services market of UAE is well developed and is the most advanced in the MENA
region. Moreover, it’s very low compared to Western countries and hence there is a huge scope
of growth. Broadband connection penetration crossed 50% in 2008 and is expected to be at 71%
in 2013. The slow growth in the broadband sector is due to high prices and the fact that dial up
services are still an offering. But decreasing prices and the need for higher speed for accessing
media rich internet applications, broadband will continue to grow. The Figure given below
shows the broadband penetration growth in UAE.
Figure: Broadband penetration growth in UAE
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