Four years ago it appeared that nothing could push Etisalat off its pedestal.
The telecommunications operator held a virtual monopoly on the UAE's mobile phone, land-line and internet market, much to the chagrin of many customers who griped about the company's significantly high costs.
All that changed the following year when the upstart operator du entered the market, offering mobile services across the UAE and internet packages in select areas of Dubai.
Since then, du has steadily gained on Etisalat, winning an increasing number of mobile customers. And it stands to capture a large piece of the internet and television market once the operators acquire the ability to share networks early next year.
Despite leading the way in the UAE's telecoms market, competition has begun to chip away at Etisalat's revenues. That picture became clearer when the operator posted its bond prospectus before issuing its US$1 billion (Dh3.67bn) sukuk on the London Stock Exchange.
Etisalat's mobile operation in the UAE is its most lucrative business, yet it is also its most vulnerable.
The company's share of the domestic mobile market is about 63 per cent, with flat subscriber growth adding only 10,000 new mobile customers in the third quarter. By comparison, du added 159,800 new customers to its mobile business in the last quarter, and now has about 37 per cent of the market.
"[du was] coming into a market where prices were very high and it's been pretty easy for them. Quite frankly, you'd have to be really bad not to take a decent share from a market which is that lucrative," said Martin Mabbutt, an analyst with Nomura Securities in London.
"You can do two things as an incumbent. You can decide to try to keep a decent amount of market share and drop prices, or you can decide to lose a bit of market share and keep pricing reasonably high in your legacy base."
Etisalat's monthly average revenue per user (ARPU) figures, a key financial measure in the telecoms business, has also been affected by the competition, decreasing from Dh176 in 2007 to Dh118 in the most recent quarter.
Etisalat's mobile business has also suffered from a high rate of "churn", the number of customers that have left the operator.
Although it is not clear how many of Etisalat's customers have signed up with du or left the country entirely, Etisalat's churn rate rose from 15 per cent in 2007 to 25 per cent last year. It has since declined to 17 per cent in the first nine months of this year.
Along with competition from du, Etisalat has also been affected by Voice over Internet Protocol (VoIP), a technology banned in the UAE. Although rates vary throughout the world, VoIP is cited as the main reason that Etisalat's customers made 10 per cent fewer international calls between 2008 and last year.
"If customers continue to utilise illegal and unlicensed VoIP services and/or if Etisalat cannot offer competitive [international calling] rates compared with its international and local competitors, this may have a material adverse effect on its business," said Etisalat in its prospectus.
To counter this trend, Etisalat says it will "focus on introducing more value-added services, such as specialised media content and enhanced mobile internet services", to help it increase its revenue from data services and offset the decline from its ARPU.
To mitigate the fortunes it is experiencing at home, Etisalat is casting its net across the Middle East, Africa and Asia. Using its financial clout, it has invested in 17 countries and now has about 94.7 million customers beyond its domestic base.
And its international operations are beginning to pay off. Led primarily from its Egyptian subsidiary, these revenues contributed Dh5.2bn, or 22.5 per cent, of Etisalat's profit in the first nine months of this year, an increase from Dh3.4bn, or 14.5 per cent, on the same period last year.
Etisalat's new strategy was confirmed last month with its offer to buy Zain of Kuwait for $11bn, or 1.7 Kuwaiti dinars per share. While Etisalat will issue $8bn in bonds to help finance the deal, which is expected to close in the first quarter of next year, it should benefit by leveraging its scale in building telecoms networks and procuring handset devices.
"The lifeblood to telecoms operators is international expansion," said Mr Mabbutt. "Etisalat's been the most aggressive, or at least the most expansionary, out of any of the Middle East operators. The Zain deal makes it into a big player and the most significant player in the region."
Etisalat officials declined to comment.
dgeorgecosh@thenational.ae
ETISALAT MILESTONES
1976: Etisalat is established as the UAE’s main telecommunications operator, enjoying a monopoly on mobile, internet and fixed-line services.
2004: The company makes its first international venture after it is awarded a mobile licence in Saudi Arabia for US$3.25 billion (Dh11.93bn)
2005: Etisalat acquires a 50 per cent stake in Atlantique Telecom, a company with operations in Benin, Burkina Faso, Togo, Niger, Central African Republic, Gabon and Ivory Coast. Etisalat purchased the operator outright in February this year.
2006: In May, Etisalat establishes a subsidiary in Afghanistan after paying $1.2bn for a licence. In August, Etisalat is awarded a licence to operate in Egypt for 16.7bn Egyptian pounds (Dh10.66bn) and begins operating as the country’s third mobile operator under the Etisalat Misr brand one year later.
2006: Etisalat acquires a 26 per cent stake in Pakistan Telecommunication Company for $2.56bn in October that includes a premium for management control.
2007: In February, du begins operations, offering mobile services across the UAE and internet packages in select areas of Dubai.
2007: Etisalat takes a 16 per cent stake in the Indonesian mobile operator XL Axiata for $438 million in December.
2009: Etisalat buys a 45 per cent stake in Swan Telecom, a mobile operator in India, for $900m. The deal includes management control of the company, later renamed as Etisalat DB India. In October, Etisalat acquires Tigo, a Sri Lankan operator, for $207m.
2010: Etisalat makes a $11bn offer for Zain, the Kuwaiti company that has operations in eight countries across the MENA region, with more than 37 million subscribers.
* compiled by David George-Cosh
The Little Things
Directed by: John Lee Hancock
Starring: Denzel Washington, Rami Malek, Jared Leto
Four stars
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
How it works
1) The liquid nanoclay is a mixture of water and clay that aims to convert desert land to fertile ground
2) Instead of water draining straight through the sand, it apparently helps the soil retain water
3) One application is said to last five years
4) The cost of treatment per hectare (2.4 acres) of desert varies from $7,000 to $10,000 per hectare
MATCH INFO
Manchester United 6 (McTominay 2', 3'; Fernandes 20', 70' pen; Lindelof 37'; James 65')
Leeds United 2 (Cooper 41'; Dallas 73')
Man of the match: Scott McTominay (Manchester United)
Essentials
The flights: You can fly from the UAE to Iceland with one stop in Europe with a variety of airlines. Return flights with Emirates from Dubai to Stockholm, then Icelandair to Reykjavik, cost from Dh4,153 return. The whole trip takes 11 hours. British Airways flies from Abu Dhabi and Dubai to Reykjavik, via London, with return flights taking 12 hours and costing from Dh2,490 return, including taxes.
The activities: A half-day Silfra snorkelling trip costs 14,990 Icelandic kronur (Dh544) with Dive.is. Inside the Volcano also takes half a day and costs 42,000 kronur (Dh1,524). The Jokulsarlon small-boat cruise lasts about an hour and costs 9,800 kronur (Dh356). Into the Glacier costs 19,500 kronur (Dh708). It lasts three to four hours.
The tours: It’s often better to book a tailor-made trip through a specialist operator. UK-based Discover the World offers seven nights, self-driving, across the island from £892 (Dh4,505) per person. This includes three nights’ accommodation at Hotel Husafell near Into the Glacier, two nights at Hotel Ranga and two nights at the Icelandair Hotel Klaustur. It includes car rental, plus an iPad with itinerary and tourist information pre-loaded onto it, while activities can be booked as optional extras. More information inspiredbyiceland.com
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
SOUTH%20KOREA%20SQUAD
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Indoor cricket in a nutshell
Indoor Cricket World Cup – Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
SQUADS
South Africa:
JP Duminy (capt), Hashim Amla, Farhaan Behardien, Quinton de Kock (wkt), AB de Villiers, Robbie Frylinck, Beuran Hendricks, David Miller, Mangaliso Mosehle (wkt), Dane Paterson, Aaron Phangiso, Andile Phehlukwayo, Dwaine Pretorius, Tabraiz Shamsi
Bangladesh
Shakib Al Hasan (capt), Imrul Kayes, Liton Das (wkt), Mahmudullah, Mehidy Hasan, Mohammad Saifuddin, Mominul Haque, Mushfiqur Rahim (wkt), Nasir Hossain, Rubel Hossain, Sabbir Rahman, Shafiul Islam, Soumya Sarkar, Taskin Ahmed
Fixtures
Oct 26: Bloemfontein
Oct 29: Potchefstroom
Remaining fixtures
- August 29 – UAE v Saudi Arabia, Hazza bin Zayed Stadium, Al Ain
- September 5 – Iraq v UAE, Amman, Jordan (venue TBC)
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
Glossary of a stock market revolution
Reddit
A discussion website
Redditor
The users of Reddit
Robinhood
A smartphone app for buying and selling shares
Short seller
Selling a stock today in the belief its price will fall in the future
Short squeeze
Traders forced to buy a stock they are shorting
Naked short
An illegal practice
