Du faces battle for market share

Analysts believe that Du, the recently launched second mobile operator in the UAE, will struggle to poach customers from incumbent and former monopoly Etisalat, although it will garner a 9% market share by the year-end. Investment bank EFG-Hermes also estimates that by 2010 Du will have captured one-third of the UAE’s over-saturated cellular sector. The Telecommunications Regulatory Agency (TRA) expects the market, which is already 125% penetrated, to grow by 20-25% in 2007 alone, as the UAE’s surging economy draws ever more migrant labour and the population continues to grow at around 9% per annum. Although half a million or so subscribers have already signed up for a Du line, a market share of approximately 8%, getting customers to actually migrate from Etisalat will be difficult for the newcomer, not least because mobile number portability (MNP) restrictions are not to be lifted until at least August, with some commentators saying it will not happen until 2008. Most UAE users would be reluctant to drop their primary number — ie the one with Etisalat. Both Du and Etisalat have said that they will battle one another on issues of quality and service, rather than price.