The document discusses developments in the United Arab Emirates' telecommunications market. It notes that: 1) The market is liberalizing with the entrance of a new carrier, EITC, which will compete with the incumbent Etisalat. EITC is starting by offering mobile/cellular services and will expand to other areas over time. 2) Both EITC and Etisalat are deploying next-generation IP and IMS networks that will enable new services like VoIP. EITC selected Nokia to provide its core network to support these services on the mobile network. 3) The cellular market is pioneering VoIP and internet access in the UAE faster than the traditional landline market

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Middle East Report
is expected only at a much later stage,
the new communication player is already
prepared for the battle over landline VoIP.
It’s currently working closely with Cisco,
to deploy EITC’s wireline core network.
Etisalat’s response to these events was
not long in coming. At the end of April,
Alcatel announced that it has been se-
lected by Etisalat to carry out part of its
UMTS deployments in the UAE. Alcatel’s
solutions will enable Etisalat to offer high-
speed mobile multimedia services such as
high speed data, video streaming, music
downloading, web browsing, chat, on-
line gaming and video conference calls.
IMS leads the pack
Since the competition in the UAE’s com-
munications market begins in the cellular
space, the introduction of this market to
VoIP is carried out through deployment
of IMS networks.
“IMS-based infrastructure allows EITC
to offer multiple applications over its cel-
lular network, including VoIP in the pub-
lic domain,” says Ray Milhem, head of
platforms, OS software, and performance
engineering, in the S&MC (Security and
Mobile Connectivity) Business unit in the
Enterprise Solutions Division of Nokia.
“As a result, the transition of cellular op-
erators to VoIP in the UAE is much faster
than the transition of landline operators
to VoIP”.
In other words, the cellular market is
opening a crack in the UAE’s regulation
to let the competition in. Moreover, the
cellular market is, in fact, spearheading
the VoIP revolution in the UAE, as well
as Internet surfing.
Etisalat is currently the major Internet
Service Provider in UAE. But its ISP’s
backbone network is still young and de-
veloping. Cellular networks in the UAE
are, therefore, expected to be used for
Internet surfing, more than the ISP’s net-
work. In light of this, EITC might use the
underdeveloped ISP’s network to attract
Etisalat’s ISP’s users.
Dubai–the engine of the VoIP-train
The communication market across the
whole UAE is booming, but Dubai, as
the major business center in the UAE, is
prominent with its highly advanced com-
munication infrastructures, and its pio-
neering in fiber optics deployments.
True, Abu-Dhabi is UAE’s official capi-
tal, but Dubai is regarded as the UAE’s
commercial capital. In fact, due to its
several free trade zones and its highly de-
veloped infrastructures, Dubai is known
as ‘the Hong Kong of the Middle East’.
While most of the emirates in the UAE
rely on oil-revenues for their develop-
ment, Dubai has minimal revenue com-
ing from oil. Its major revenues come
from commerce.
The jewels in Dubai’s crown are its free-
trade zones, where most of the world’s
largest companies have established re-
gional offices. Through these offices they
are conducting their business throughout
most of the Middle East, and some also in
North Africa.
Dubai’s most prominent free trade
zone is situated in ‘Jabel Ali’, which has
one of the world’s largest port terminals.
The commercial activity in Jabel Ali is re-
sponsible, to a great extent, for Dubai’s
(and therefore, for the UAE’s) very high
economic growth. Created in February
1985, Jabel Ali hosts over 1200 compa-
nies from more then 100 countries.
Hosting these giant companies and
maintaining this huge commerce opera-
tion (throughout all the free-trade zones)
is creating strong demand for the most
advanced communication infrastructures
and services, including access to high
speed broadband networks, VoIP appli-
cations, etc.
Fiber optics coverage
All in all, the competition in the UAE’s
cellular space–although limited to two
players–is alive and kicking, and the
market is already benefiting from the sig-
nificant changes.
The liberalization in the wireline mar-
ket, on the other hand, is still dragging
its feet. True, EITC is defined as a carrier
of voice, data, video, and content over
fixed and mobile networks. However, at
the moment, the UAE’s government, like
many other governments in the Middle
East, is reluctant to open the wireline
communication to competition.
One reason for this policy is the tech-
nical expertise that the traditional incum-
bents gained, resulting from many years
of dominating the network. But maybe,
more importantly, incumbents are used
as cash cows for their governments. In
fact, the incumbent Etisalat is one of the
more fundamental sources of the UAE’s
income.
Nonetheless, despite the incumbent’s
dominance in the UAE’s wireline commu-
nication market, technological progress
did not pass it by. Following its decision
to deploy fiber optics, instead of upgrad-
ing the copper infrastructure, the UAE’s
government made large investments in
deploying optical networks, mostly in
Dubai, during the last 15 years or so.
The result of these investments is
wide coverage by optical networks; they
encompass almost all the free-trade
zones in Dubai, as well as some of the
small cities. These days, the UAE govern-
ment continues to deploy fiber optics in
other emirates across UAE, but no doubt,
Dubai is the fiber-optics’ pioneer of the
Arab world.
In fact, Dubai was always a pioneer in
deploying advanced technologies. In the
past it was the first one to deploy X.25 in-
frastructures, frame relay, and ATM. Now,
its deployments of IP backbone networks
are moving full steam ahead.
The IP revolution in the UAE is cur-
rently taking its first steps, as well as in
some other countries in the Middle East.
Nokia and Cisco are already discussing a
lot of IP projects with many carriers in
the region. The Kuwaiti-based mobile op-
erator MTC, for example, is working very
closely with Nokia and Cisco, to provide
VoIP services. Vendors such as Ericsson,
Motorola, and others, are working closely
with other carriers in the Middle East.
(Special thanks to Ray Milhem of Nokia
for contributing to this article.) V
Hadass Geyfman, our Middle East Editor,
has over 13 years of experience as a telecom
and technology investigative reporter. She
can reached at hgeyfman@vonmag.com.
InternationalFocus
Middle East Report
by Hadass Geyfman
Are two carriers a duopoly or real competition?
Next-Gen for the UAE
InternationalFocus
The United Arab Emirates’ commu-
nication market is starting its engines and
heading towards increasing liberalization
and transitioning to next-generation net-
works. The first signs of this trend are
rapid deployments of IP infrastructures,
by both the new communication player
and the traditional incumbent.
Ever since the new communication ser-
vice provider EITC (Emirates Integrated
Telecommunications Company) was est-
ablished as a competitor to the incumbent
Etisalat, the entire UAE’s communication
market is moving intensely towards new
generation networks.
At the moment, however, actual de-
ployments of IP networks and next-gen-
eration services occur mainly in the cellu-
lar space, where the competition begins.
EITC is operating under the brand
name ‘du’, and is entering the communi-
cation market in the second half of 2006.
The company is planning to offer voice,
data, video, and content services over
fixed and mobile networks to residential
and corporate customers.
Yet, according to EITC’s statements,
pan-UAE mobile services will be avail-
able at launch, while fixed-line, broad-
band Internet and pay-TV services will be
rolled out in a phased manner. In other
words, the new player is beginning its ac-
tivity as a cellular operator, and will enter
other segments later on.
The company is 40% owned by the
Federal Government of UAE. The other
60% is divided amongst the compa-
nies Mubadala Development, Emirates
Communications and Technology, and
other investors.
The UAE’s communication market is
relatively advanced (in its technology
aspects); however, until recently, it was
one of the least deregulated markets in
the Middle East (along with Qatar). The
incumbent Etisalat was the only service
provider of cellular, landline communi-
cations, Internet (ISP), pay-TV and other
communication services.
With hindsight, it seems that the de-
regulation of the UAE’s communication
market moved a step forward after the
country’s Supreme Committee–estab-
lished under a federal order, to restruc-
ture the communications sector–en-
dorsed board resolutions and the budget
of the Telecom Regulatory Authority.
On April 2004, a presidential decree
was issued, canceling Etisalat’s monop-
oly. The Supreme Committee’s mission
was to grant licenses for new operators
and to look into the option of reducing
the government’s share in Etisalat, by re-
cruiting new investors (the government
owns the majority of Etisalat’s shares).
This trend is often encouraged by World
Trade Organization (WTO) membership
requirements.
IMS in full swing
Skeptics might say that two operators,
each partly owned by the government,
are actually a duopoly–not a real compe-
tition. And yet, the appearance of the new
entrant is definitely shaking up the UAE’s
communications market.
Etisalat is currently one of the larger
carriers in the Arab world, if not the larg-
est. The task of taking significant mar-
ket share from it is quite challenging for
EITC. It requires the latter to be very at-
tractive for Etisalat’s customers.
This challenge makes EITC highly mo-
tivated to provide more next-generation
value-added services. In order to do so,
EITC must deploy IMS (IP Multimedia
Subsystem) infrastructure, and deploy-
ments are already in full swing.
Last March, Nokia and ‘du’ (EITC)
signed an agreement, according to which,
Nokia will provide EITC’s entire core
network and a large proportion of the ra-
dio network for GSM, GPRS, EDGE and
WCDMA 3G. The deal is estimated to be
at least US$190 million.
The IMS-based network, deployed by
Nokia, will enable ‘du’ to offer a wide
rangeofnewservicesovercellular,includ-
ing data and Internet access via the cellu-
lar network, as well as value-added ser-
vices such as Push-to-talk over Cellular,
Presence, Multimedia Messaging Service
Center, and Intelligent Service Node.
But EITC is not stopping there.
Although its entry to the landline market
“...the cellular
market is, in fact,
spearheading the
VoIP revolution in
the UAE.”
12:01 pm, 5/26/06By Richard Grigonis at 3:14 pm, 5/26/06