Etisalat launches higher speed mobile data service

ABU DHABI, UAE: Emirates Telecommunications Corp (Etisalat) launched a new high-speed mobile broadband network in the United Arab Emirates as the former monopoly bets on data traffic to lift sagging profits.

Etisalat will initially provide the service, based on long-term evolution (LTE) technology and sometimes called 4G, in 70 per cent of the UAE's urban areas, chief marketing officer Matthew Willsher told reporters in Abu Dhabi.

LTE allows for data transfer speeds of more than double that of older mobile networks.

Also Read: Long Term Evolution: Deployment Options and Challenges

"Across the world . voice yields and revenues per minute are declining, whether it's on a national or international (call) basis," said Willsher. "Mobile data is a huge opportunity for growing revenue. Data is starting to reach exponential growth, we are growing at approximately double a year."

Etisalat has spent 6 billion dirhams ($1.63 billion) on its local LTE and fibre optic networks and on Wednesday revamped its mobile data tariffs to help boost demand.

Yet telecoms operators are also dependent on handset manufacturers to drive data growth, with Etisalat's LTE offering initially only available via USB dongles.

"Over the next six months we'll start to see tablets and handsets arrive with LTE," said Willsher.

Data and mobile broadband prices in the UAE are substantially higher than those in the West, said Matthew Reed, a senior analyst at Informa Telecoms and Media in Dubai.

"UAE operators don't have much room to raise prices," he added. "Western operators have moved away from unlimited data plans and UAE operators need to structure offers to avoid that trap. Plans are likely to become more complex, but there is a danger this could confuse customers. Operators are walking a tightrope."

Etisalat, which operates in 18 countries, has reported falling profits in five of the past six quarters.

About three quarters of its revenues in the first half of 2011 came from the UAE, where rival du now claims a 44 per cent share of the oil exporter's mobile subscribers. Du launched services in 2007.

Mobile penetration in the UAE was 145 per cent in 2010, down from 154 per cent a year earlier, according to the International Telecommunications Union.