Background

The UAE telecom market remains a strong duopoly. The UAE has one of the most developed telecom market and technologically advanced telecom infrastructure in the Gulf, according to the Global Information Technology Report produced by the World Economic Forum. It also stands in 7th place in the latest Business Environment Rankings for the telecoms sector of the Middle East. Its Mobile penetration reached 211.7% in June 2009, the highest in the world.

According to an RCNOS report, published in September 2009, the UAE’s telecom market has shown huge growth recently, mainly aided by government initiatives aimed at the deregulation of the market and introduction of competition. Mobile penetration surpassed the 200%-mark in 2008 leaving less room for operators to expand in terms of new subscribers.

At the end of 2008, there were 1.64 million fixed subscribers in the country, representing a penetration rate of 34.1% and a growth rate of 19.5% over 2007. By the end of the first half of 2009, the number of fixed subscribers had stagnated to 1.66 million and we estimate that this number will rise to 1.68 million by the end of 2009.

Growth is expected to return in 2010 at 4.1% and the number of fixed subscribers is forecasted to grow by an average rate of 3.1% over the next 5 years. At the end of the forecasted period, the number of fixed subscribers should have reached 1.9 million representing a penetration rate of 34.8%.

With high rates of mobile penetration in 2008, however, growth slowed in 2009. In the first 6 months of the year, the number of mobile subscribers increased by 3.9% to 10.2 million. It is estimated that mobile penetration has now reached saturation and should hover around the 200%-market over the forecasted period.

UAE’s Internet market is one of the most developed in the Middle East. By the end of June 2009, this number is estimated to have increased by a further 7.3% to 1.3 million. With an Internet penetration rate of 26.8%, the UAE is the most Internet wired country in the region, after Israel. With the arrival of competition, in the form of du, the number of Internet subscribers is forecasted to continue to growth by an average of 9.5% over the next 5 years to reach 1.9 million and a penetration of 34.3% by the end of 2013.

In the first 6 months of 2009, the number of broadband subscribers increased by a further to 615,000. At the time, broadband connections represented 47.7% of all Internet customers.

The TRA (Telecommunication Regulatory Authority) remains at the forefront of the success of the country’s telecom sector. It is continuously considering and evaluating ways to further intensify competition in the UAE telecom market.

Keeping in view that the UAE telecom market remains duopoly of Etisalat and du and their importance in the success of the country’s telecom sector, the report offers rational analysis on both these operators. This includes in-depth research and extensive analysis on their business activities, recent developments and SWOT analysis in regard to the UAE telecom industry.

Messages

Du penetrated many messages in the month of December 2009. The messages contained good reviews as well as messages on new products, their subscribers-base growth, receiving awards, deals as well as its fierce competition with Etisalat.

Etisalat on the other hand, penetrated messages on receiving both good reviews, as well as complaints. It also had messages on hosting various events, its deals and its launching of various products. Etisalat also sponsored various events such as the Sharjah Water Festival.

Facets Of Coverage

Etisalat achieved a substantially higher coverage than du with 464 clippings relative to du’s 193. Etisalat maintained that pattern in terms of Newspapers OTS (Opportunities To See), while du and Etisalat achieved comparable Magazine OTS with 865K for Etisalat and 735K for du.

In terms of coverage size, Etisalat outranked du in both newspapers and magazines’ coverage sizes. However, it must be noted that du’s magazine coverage comes close to Etisalat’s, indicating du’s strong presence in magazines.

Content Analysis

Etisalat achieved a prominence of 0.38. The prominence index is a value to the level of the mention prominence taking into account the location, visual and tonality of the mention. Du achieved a higher prominence index of 0.41.

Du achieved highest latent (indirect) mentions than manifest (direct) ones, while Etisalat achieved far more manifest mentions than latent ones. As latent messages are not the result of PR Influence, and Etisalat has a higher volume of latent mentions relative to du, this can be justified by Etisalat’s larger volume of coverage and particularly the coverage resultant from their PR Influence.

Etisalat achieved more than twice as high the amount of NRD (Negative Reputation Drivers) relative to du, due to numerous negative reviews, as well as stocks movements.

Conclusion

Both Etisalat and du enjoy playing in a strong and growing telecom sector. Competition remains strong between the two large telecoms. When du joined the market it began with countless negative reviews and the challenge of competing with Etisalat, but it has turned a corner and continued acquiring subscribers at a faster rate than Etisalat.

While Etisalat remains the larger of the two, and dominating the newspaper media, du is competing fiercely in the magazine media. Both companies are expected to boost their PR work if they are to continue to compete in a market that is quickly reaching saturation levels.