Etisalat has slashed its broadband charges and says further price cuts are to come to mark a new era of competition with its rival du.
The operator said it had cut the price of its basic broadband package in the UAE and was studying a reduction of landline calling rates by 10 to 30 per cent.
It hopes to entice users away from slower internet connections running at 256 kilobits per second (kbps) and 512kbps.
Rashid Majid Al Abbar, the vice president of home products marketing for Etisalat, said the company had cut the price of its 1 megabits per second (mbps) internet package to Dh189 (US$51.45), down from Dh259 per month.
The package Mr Al Abbar was referring to also includes a landline connection. The rate cut was made in the “last few weeks”, he added.
Consumer broadband fees in the UAE are among the most expensive in the world, according to the consultancy Ovum.
Entry-level broadband subscriptions cost $868 annually in the UAE – more than eight times the cost of a basic connection in countries such as Russia, India and Ukraine, Ovum said in a report issued last August.
Etisalat’s competitor du currently charges Dh249 per month for a 1mbps internet connection. However, it also has a package priced at Dh199 that includes faster 8mbps internet plus a landline.
Etisalat’s move to reduce broadband prices comes ahead of a planned liberalisation of the telecoms market in the UAE.
The two operators are restricted to selling broadband, television and fixed-line telephone connections within specific areas of the UAE.
But under a much-delayed plan, the two operators are set to compete freely on fixed-line services, starting later this year.
Du did not immediately respond to a request for comment.
Mr Al Abbar said the move by Etisalat was part of a plan to entice customers to use faster internet connections.
“That is the long-term strategy,” he said. “We want to have more high-speed customers.”
Eventually, Etisalat will stop offering 256kbps and 512kbps packages, said Mr Al Abbar. “If customers are willingly migrating to these higher speeds, then eventually we see, down the line, we will not have these services,” he said.
Etisalat also said it was studying the possibility of reducing the charges for calls made from UAE landlines.
The operator is proposing “rate cuts of 10 to 30 per cent on local, as well as international calls to specific destinations”, Mr Abbar said.
The international destinations to which calling charges will be cut are “not yet finalised”, he added. But he said the countries under consideration include those in the Arab world and Asia.
The reduced landline rates should be implemented in the second half of this year, Mr Al Abbar said. Such a move will require the approval of the Telecommunications Regulatory Authority.
iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.