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UAE's telecommunications sector

Introduction 


The UAE's telecommunications sector is the most highly developed in the region, with state telecommunications giant Etisalat also being one of the region's top companies. Through its 34 per cent owned affiliate, Thuraya, Etisalat will launch its own satellite during 2000, this being intended to serve up to 1.9 million users in 49 countries from the Atlantic to the Indian sub-continent and Central Asia. Locally, there are over 450,000 mobile telephones, while access to Internet services, has been available since 1995, with connection and usage rates being continually reduced as Internet connections grow A complete e-commerce service, Contrast, was launched in 1999. Now planning to diversify into cable television, Etisalat is also a key partner in the FLAG (Fiber-Optic Link Around the Globe) network, the world's longest operating submarine cable system, which links Europe to Asia and the Far East.


The UAE is entering the twenty-first century with a sophisticated telecommunications sector which provides its citizens with a highly efficient and cost-effective communications  network. Emirates Telecommunications Corporation (ETISALAT), one of the largest and most successful companies in the Middle East, controls the telecommunications business in the UAE. Although ETISALAT recorded a a net profit of Dh 2.012 billion for 1998 and revenues surged by 23 per cent to Dh 5.07 billion surpassing its performance in 1997 by Dh 157 million, the company faced many challenges in 1998. Not least of these were the crises in East Asia and Russia, coupled with the steep fall in oil prices, all of which had a negative impact on business and trade, regionally and globally. Nevertheless, developments in Africa and Asia were of considerable interest to ETISALAT and decisions were made not  only to invest but also to actively participate e in telecommunications projects in Zanzibar and Sudan as well as in projects closer to home.  


ETISALAT holds slightly over 34 per cent of its associate UAE-based Thuraya Satellite Telecommunications Company and has continued to expand its position in global markets through acquisition of a further 3.1 per cent stake in ICO Global Communications Holdings Ltd as well as 1 per cent in Qatar Telecom (Q-Tel).


INTERNET


ETISALAT  has provided Internet services to the UAE since August 1995. The country now has one of the highest rates of Internet usage in the Middle East. At the end of March 1999 ETISALAT launched its value-added Internet roaming service which allows Internet dial-up customers to travel anywhere in the world and access their home Internet Service Provider (ISP), read and retrieve e-mail messages and browse the World Wide We b, all at the cost of a local call. This was made possible through the Global Roaming Internet Center (GRIC), a worldwide alliance of ISPs of which Emirates Internet is a member.


Price reductions


As part of its programme to encourage Internet usage, in July 1999 ETISALAT announced a major shake-up in its Internet service charges with immediate effect. The new revised flat-rate represented a 50 per cent reduction in the previous rate. Major reductions on the Internet for businesses and educational institutions also took immediate effect: these included reductions of 50 per cent for government schools and about 30 per cent for business, private schools and academic institutions.


Free Internet training


Free Internet training for UAE nationals was offered by ETISALAT in Abu Dhabi and Dubai. Conducted by specialized  instructors from the ETISALAT training center, the two-hour sessions included a theoretical and hands-on workshop aimed at addressing various applications of the service and its benefits. The seminars and workshops attracted nationals from the diplomatic, government, commercial, academic and tourism sectors.


E-commerce


ETISALAT launched its e-commerce services in October 1999 through its new business unit Comtrust. The e-commerce facility, which is being set up with a phase one investment of Dh 30 million, will serve the entire region and is due for completion in the fourth quarter of 1999. As the first in the region to offer a complete, secure e-commerce platform, Comtrust will offer online payment solutions. A host of new telecommunication services and bill payments will be available to customers through its Web Shop, an integral part of this new venture.


HIGH-CAPACITY NETWORK


In June 1999 Fore Systems, a leading global supplier of networking solutions, was awarded the contract to supply the new high-capacity equipment for the Etisalat Asynchronous Transfer Mode (ATM) network including LAN and WAN. This scalable network equipment will enable ETISALAT to deliver high-speed network connectivity to all its branches in the UAE.


TELEPHONE CARDS


ETISALAT has completed the first phase of a state-of-the-art manufacturing facility for Smart and SIM cards. The first phase of the project caters for in-house requirements for GSM SIM cards and as a pilot unit for payphone Smart card requirements. The second phase will provide for the wide scale manufacture of these cards with an initial annual production target of 65 million cards.


MOBILE PHONE SERVICES


By November 1998 the UAE had more than 450,000 subscribers connected to the mobile network nationwide with penetration levels reaching 17 per cent. Future expansion plans aim to double this penetration figure through increasing network capacity to one million subscribers by the year 2000. This will be achieved by continued review of prices and enhancement of the GSM service in accordance with the most up-to-date developments in the field. In order to achieve these objectives ETISALAT has signed a Dh 240 million contract with Ericsson for a micro cell expansion of the GSM system. The project will enlarge the network around Dubai and Al Ain as well as extending the existing GSM micro cell network. In April 1999 ETISALAT awarded a Dh 100 million contract to Motorola's Network Solutions Sector (NSS) for the expansion of the GSM900 MHz network in Sharjah and the Northern Emirates. Roaming deal with ICO Satellite communications firm ICO Global Communications signed aroaming agreement with ETISALAT in July 1999. ICO and ETISALAT have agreed to implement bilateral roaming, allowing ETISALAT’s cellular customers to use the ICO global satellite system and customers of ICO to use ETISALAT's cellular network. Similar deals have already been signed with  Saudi Tel ecommunications Company, Bahrain Telecommunications Company (BATELCO) and Kuwait's Mobile  Telecommunications Company. ETISALAT has invested US $140 million in ICO and will develop and operate one of 12 satellite access nodes and distribute ICO’s products and services. ICO expects to begin commercial operations of its mobile satellite services in the third quarter of the year 2000. One of the 12 satellite access nodes being set up worldwide is in the UAE. The main difference between the ICO and the UAE ’s Thuraya satellite project, in which ETISALAT is also a share holder, is that the former is international while the latter is regional.


THURAYA SATELLITE SYSTEM


Thuraya is the region's largest satellite telecommunication project. The mobile satellite communications network system will cater to 1.8 million users in 49 countries in the Middle East, north Africa, eastern Europe, central Asia and the subcontinent. The first Thuraya satellite is scheduled to be launched in May 2000 and will begin commercial operations in September. Thuraya services will be offered via handheld, vehicular and fixed terminals. Thuraya's flexible dual-mode (GSM and satellite) handsets will provide advanced voice, data, fax, messaging and location determination services. The system will further enhance telecommunications services for millions of people in the areas covered by its satellites.


In July 1999 Thuraya Satellite Telecommunications Company signed a Dh 2. 2 billion (US $600 million) financing package with a consortium of local and international banks to fund the system. The complex financial structure is a combination of conventional and Islamic financing which will be used on top of the company's equity of Dh 1.835 billion (US $500 million) to complete the capital requirements of the project outlay of Dh 4 billion (US $1.1 billion). In September 1998 ETISALAT became the first service provider for Thuraya’s regional services. ETISALAT will provide Thuraya's mobile satellite services in the UAE with rights to distribute and market user terminals, SIM cards, pricing, billing and other customer care aspects. Countries which have signed service provider agreements include Iran and Libya , following the suspension of UN sanctions. All AGCC countries are also partners in Thuraya.


 


CHANNEL TV


From the end of 1999 thematic channels catering to the diverse demographic groups in the UAE will be available on ETISALAT's cable television network in addition to the 100-odd channels beamed directly into subscriber homes through hybrid fibre coaxial technology. These ‘exclusive’ channels will be created by ETISALAT for specific audiences with a focus on events with local relevance. The 100-odd channels are being selected by ETISALAT TV from among thousands on offer. The channels will be in 10 different languages, including Arabic, English and Asian languages. Subscribers will be given options of choosing bouquets of 40 or more channels. The basic difference between ETISALAT's cable channels and the existing satellite channels is that ETISALAT will offer distortion-free reception and clear sound without the need for satellite dishes. The network will eventually cover the whole of the UAE and in its initial phase will be able to provide services to 20,000 residential units in Abu Dhabi and Dubai.


FIBER OPTIC CABLE


ETISALAT 's submarine cable unit is a separate company called Emirates Telecommunications and Marine Services FZE (E-Marine). The wholly-owned subsidiary was set up in the Jebel Ali Free Zone in Dubai and is the only company in the region to h a ve two strategically located, fully functional cableships, the C.S. Etisalat and C.S. Um m Al Anber. ETISALAT and Marine Services FZE (E-Marine) recently announced completion of the installation of the FLAG (Fibre Optic Link Around the Globe) extension to Jeddah and Aqaba. FLAG is the world's longest operating submarine cable system, linking Europe, Asia and the Far East. ETISALAT's submarine cable unit has been p roviding services not only to domestic submarine cables but also other submarine cables in the region which link the UAE to India, Iran, Pakistan and all the AGCC countries.


SOLAR ENERGY PAY PHONES


ETISALAT  has installed a number of solar energy payphones in rural areas of Ras al-haimah. The move was necessary to resolve communication problems in those areas especially along the major roads which needed such facilities for emergency cases.


EMIRATISATION IN THE TELECOMMUNICATIONS SECTOR


A major objective of ETISALAT’s emiratisation drive is to ensure that by the end of the year 2000, 46 per cent of its employees will be UAE nationals. ETISALAT, with a Dh 40 million annual training budget, has begun several specialized training programmes to encourage nationals to enter its work force. In 1998 ETISALAT recruited 770 nationals, both male and female. This was the highest number recruited in any single year, earning the company the Employer of the Year Award for 1999'. ETISALAT employs a work force of 8,000, 28 per cent of which are nationals. Eighty-eight per cent of its senior staff are nationals.

 


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