Net prices slashed as UAE joins the broadband revolution

Etisalat and rival telecoms operator du have reached a quid pro quo with Etisalat giving du access to its network monopoly in exchange for du significantly lowering the cost of its broadband packages.

This heralds a new era for super-fast Internet access in the UAE which has been lagging behind other nations in developing this new communications technology. ArabianMoney was among commentators suggesting this strategy (see this article).

Broadband cheaper

From August du will bring the cost of its basic broadband package – TV, Net and landline – down from Dhs499 to Dhs249. This undercuts the present Etisalat eLife package offering similar services for Dhs399.

This means that the cost of broadband Internet access in the UAE will now be competitive with Canada and Ireland. And as more users come online new business opportunities are created for Net entrepreneurs and existing businesses that adapt successfully to the media.

The end of the Etisalat network monopoly is also highly significant as it opens the way for competition in all aspects of telecommunications. Broadband pricing is merely a first step. Long distance phone charges are also likely to drop, although the use of services like Skype is also going to impact this revenue source for the telecom giants.

In most developed countries telecom operators have allowed zero-cost phone calls with Skype over their networks and gone instead for broadband as a replacement revenue. This is a sensible decision to move with the technology instead of trying to block it.

Do or die

Those who stuck with the horse-and-carriage when automobiles were invented did not last long. Technology moves on and so must business, or it will die.

By the same token UAE businesses that now continue to ignore the Internet are perilously exposed. Imagine being a publishing house without a significant online presence. That will be a death sentence.

But less obviously this also applies to even the most humble of small shops. For consumers will not find you if you do not have a web page, and in that case why not start running a small e-commerce site and see how it goes?

E-commerce is taking over in some sectors in the UK. In bibliophile Oxford there is not a single second-hand bookshop left. They have all gone online. By downsizing operating costs the Internet can make previously unprofitable businesses profitable and destroy the profit margins of those who refuse to change.