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Etisalat’s 3G uptake hampered by handset shortages

23 Jul 2004

The United Arab Emirates’ monopoly telecoms service provider Emirates Telecommunications Corporation (Etisalat) has reported a slow uptake for its fledgling 3G mobile service, although officials have been quick to point the finger of blame at handset shortages rather than consumer apathy. Etisalat has garnered 5,000 UMTS subscribers since launching the new network at the end of last year. At the time many predicted brisk demand for 3G in the oil-rich Gulf region, noting that the strong growth of 2G services in the country and the popularity of MMS in the Emirate state would provide a good platform for developing advanced mobile services. Since the start of 2001 the UAE’s 2G wireless market has blossomed and by the end of June 2004 there were more than 3.308 million phones in circulation, up from just under 1.42 million at the start of 2001, a cellular penetration rate of over 81.8%. In addition, the number of MMS users now stands at around 280,000 and is forecast to explode once the company has implemented a national roaming scheme. Moreover, Etisalat is also introducing value added services for its 2.5G users, including e-mails, the facility to provide missed call notification even when the unit is switched off and a range of other content-based services. However, the growth has yet to be mirrored for 3G and Mohammad Ahmad Al Fahim, executive vice president for marketing at Etisalat, has voiced his concerns that handset shortages are likely to hamper growth for the remainder of the year. The telco’s 3G users have to date been limited to using the Motorola A835 handset and new models are not expected to become widely available until the fourth quarter at the earliest.

Etisalat launched the Middle East’s first third-generation mobile phone network on 24 December 2003 under the brand name Mubashir, having selected China’s Huawei Technologies to update its existing network and supply it with a complete UMTS network solution at a cost of AED60 million (USD16 million). At launch it was available in the UAE’s major cities, with the company saying that it planned to expand the network to cover the whole country by the first quarter of 2004, by which time it would be able to support up to 160,000 users; the first phase of the network was completed on 19 July. Subscription to the Gulf state’s first 3G service cost around USD80 – between three to four times the rates levied for ordinary GSM services.

United Arab Emirates, Etisalat UAE
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