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United Arab Emirates Telecommunications Report Q3 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: August 2009 Product Code: R302-7571 Description Our latest update on the telecoms market of the United Arab Emirates (UAE) includes expanded marketdata sections covering the country’s fixed-line and internet sectors. The latest regulatory data shows thatthe number of fixed telephony subscriptions in the UAE rose significantly in 2008. During the year,growth in the fixed-line sector was stronger than in any of the preceding years. Although both EmiratesTelecommunications Corporation (Etisalat) and its rival, Emirates Integrated TelecommunicationCompany (du), reported fixed-line growth, it is thought that du was responsible for the accelerated fixedlinegrowth in 2008. Growth in the fixed-line sector has been driven partly by continued demand forfixed-line services among businesses, and partly by the absence of a growing market for VoIP services.An expanding market for VoIP services is often one of the main characteristics of a market wheretraditional fixed-line services are experiencing rapid decline. Although the UAE fixed-line market continued expanding throughout 2008, there are signs that, as ofearly 2009, this situation has begun to change. For the quarter ending March 31 2009, Etisalat reported atotal of 0.7% q-o-q decline in the size of its fixed-line subscriber base. This was the first time that Etisalathad experienced a decline in fixed-line customer numbers. Going forward, BMI now predicts that theUAE fixed-line market will experience a slowdown in growth in 2009. The slowdown is expected tocontinue in 2010, by which time the penetration rate will have begun to fall. By 2011, we predict negativegrowth for the fixed-line market. In the latter years of our forecast, we envisage faster rates of fixed-linedecline; this decline could be faster still if the current restrictions on VoIP usage are relaxed. Meanwhile, broadband subscriber growth in 2008 was slightly stronger than we had predicted. By the endof the year, the UAE had 529,000 broadband subscribers according to the regulator, equivalent to apenetration rate of 11.2%. Based on the new regulatory data, as well as figures published by Etisalat anddu, we have revised our growth forecasts for the number of internet users and broadband subscribers inthe UAE. Having reached 60% at the end of 2008, we now envisage the country’s internet user baseexpanding to over 70% of the population by the end of 2009. Meanwhile, we predict a 24% increase inthe number of broadband subscriptions in 2009. By the end of the year, we anticipate a penetration ratethat exceeds 14%. Growth in the broadband market will continue to be driven by lower prices, and by thedeployment of higher speed services. The market will also benefit from the expansion of FTTHinfrastructures, which will enable the delivery of new services such as IPTV. In the current update, the UAE has strengthened its overall score as a result of an improved TelecomsMarket rating. However, this improved score has not prevented the UAE from moving one place downour latest set of Business Environment Rankings for the telecoms sector of the Middle East. BMI remainsbearish regarding the country's growth prospects this year; indeed, we are now forecasting an outrightrecession, with the economy expected to contract by 1.7%. Table of Contents
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