UPDATE(S) - We had a very interesting interview with the TRA director general, Mohamed al Ghanim,
who shed more light onto the whole situation. Etisalat
also had its say, claiming the cost of complying with the TRA's request is "unjustified."
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The Arabic daily Al Khaleej has a story today saying that Etisalat has been fined by the Telecommunications Regulatory Authority (TRA) for failing to move forward in allowing competition in the landline telephone market.
The fine is apparently related to Etisalat implementing the carrier pre-selection system, which lets people use du through the Etisalat network. It is pretty much the central plank of the liberalisation of the UAE telecom market, which makes this a pretty interesting story, if true.
The system was
announced by the TRA back in July last year, but has yet to be seen alive and in the wild.
The report, citing unnamed sources, said Etisalat was given a deadline
of the end of March to implement the system, which requires technical
adjustments to its physical infrastructure. The company has yet to
complete the change, and is reported to have complained that the
transition is too costly, and will be better done once the new national
fibre-optic network is completed.
We're following all this up with both the TRA and Etisalat, but as
usual, its takes a day or two to get a response - so stay tuned.
As anyone who pays for broadband knows, competition in the market for fixed line telecoms is seriously lacking here.
As we reported last week,
Farid Faraidooni, the executive vice president for commercial
operations at du, thinks competition via carrier pre-selection will be
the main catalyst for lower broadband prices.
Tom - How high would those fines reach if Etisalat waited as long as it wanted to fix the issue? Is it realistic that the TRA would fine them that much?
The fines would be, scientifically speaking, lots. Einstein said compound interest is the most powerful force in the universe, and Dh400,000, compounding monthly at 100% interest, is a pretty intense proposition.
I think when we tried to calculate it, was something in the range of Dh420 billion by the end of 2010.
Obviously it won't get to the level when the government fines another government entity an amount equal to something like 4 times GDP. But who knows where this is going.