Etisalat monopoly ends, business begins

The UAE President Sheikh Zayed bin Sultan Al Nahyan issued a Federal Decree this week creating a new Supreme Committee to supervise the telecommunications sector, and a Monitoring Authority to ensure good services for the public good.

This announcement effectively dealt a death-blow to the Etisalat monopoly on the telecoms sector in the UAE, and opens the door to a new era of competition among telecom suppliers.

From what has been seen elsewhere in the region and internationally, some judgment can be made about what this means in practice: a second, and possibly a third mobile phone network, competing on service and price; a proliferation of Internet Service Providers; more cable TV and video services; and telecom IPOs on the UAE stock market.

Now we will have to wait and see what the Supreme Committee decides. But its membership is encouraging. Dr Mohammed Khalfan bin Kharbash will represent the UAE Cabinet, and Ahmed Mohammed Al Hamiari the Presidential Court; from the Dubai side the appointment of Dubai Media City founding father Ahmed bin Bayat is most welcome.

The Federal Decree also defined the criteria for licensing new telecom companies in the UAE which will be down to a decision by the new Supreme Committee.

The liberalization of the telecommunications sector is fully in line with the World Trade Organisation's rule book and brings the UAE further into the global fold of business. It also keeps pace with Bahrain and Kuwait which have already liberalized telecoms to considerable effect.

Consumers will be hoping that Etisalat will also respond constructively to competitive pressure. For in many nations where telecoms have been liberalized the impact on the incumbent operator has been excellent, vis-à-vis improved customer services, lower prices, and more flexible operating practices.

For the UAE telecoms sector and its supplier this is a great day. Etisalat has done a great job in creating the region's most-wired society, now greater choice, lower pricing and innovation will let the sector really boom.