By Richard Dean
The UAE has banned telecoms operators from selling services below cost
in a policy overhaul that will also extend curbs on Internet
pornography to censorship-free business parks, the chief regulator
said.
The UAE is preparing the telecoms sector for competition with a second
nationwide operator launching mobile, fixed-line and data services
this year. The regulator has decided to limit the ability of both
operators to cut prices.
"We have issued a price regulations policy. No operator will be
allowed to sell services at below cost to kill competition, or to
offer cross subsidies," said Mohamed Al-Ghanim, director general of
the Telecommunications Regulatory Authority (TRA).
Cross subsidization is when an operator offers cheap or free services
to lure customers, and then charges premium rates for other services,
such as international calls.
"This is anti-competitive. It will not be allowed," Ghanim told
Reuters in an interview on Tuesday.
The TRA is also considering a move to allow Voice Over Internet
Protocol (VOIP), which is currently banned in the UAE -- much to the
annoyance of the majority expatriate population, which wants to make
cheap calls to families, mostly in Asia and Europe.
"I think a decision has to be made in the next quarter whether it is
allowed or not," said Ghanim. "Of course, it brings a positive impact
in reducing tariffs, but we have to look how it would impact the
sector." He said the TRA would consult public opinion before making a
decision.
State-controlled Etisalat enjoys a monopoly throughout most of the
country, blocking cheap VOIP phone calls and enforcing a federal ban
on Internet pornography and gambling.
At present a few thousand homes and offices in Dubai, served by niche
telecoms operator TECOM, are exempt from a national ban on sites
considered "unIslamic."
Dubai-government owned TECOM enjoys a mini-monopoly in a handful of
new developments including Dubai Internet and Media City, which it
owns. It also serves homes built by Emaar Properties -- part-owned by
the Dubai government.
TECOM has a stake in Emirates Integrated Telecom Company, which won
the second national license in December.
Ghanim warned that it must abide by UAE censors, who last week banned
access to the online version of Britain's popular The Sun newspaper.
"The Internet will remain censored for cultural reasons. We have to
keep our culture protected," he said. TECOM "will have to abide by the
rules."
Dubai's free zones have lured scores of media brands, including CNN
and the BBC, on the promise of freedom from censorship, which is the
norm in the Arab world. Some observers fear online censorship within
the zones could undermine their reputation as creative hubs.
Ghanim confirmed comments made to Reuters in May that a third operator
would not be licensed before 2015 in the UAE, a member of the World
Trade Organization (WTO) since 1996.
"We have submitted the schedule of commitment for the telecoms sector
to the WTO," he said.
He said the UAE was under some pressure from the United States to open
the telecoms sector before 2015, as part of a Free Trade Agreement
that the two countries are negotiating.
"This is one of the areas we are seriously discussing with the U.S.,"
said Ghanim, who heads the telecoms negotiating team.
He said EITC was building a second GSM mobile phone network across the
seven emirates that make up the UAE, which should be ready by
mid-2006.
Copyright 2006 Reuters Limited.
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Richard Dean (reuters@telecom-digest.org)