UAE VoIP restrictions creating illegal speakeasies

01 March 2012 | Tim Phillips

The behind-the-scenes battle for VoIP in the UAE.

Can a country control the spread of voice over IP? The grand experiment in the United Arab Emirates continues as its state-owned telecoms companies tease users remorselessly. In 2006, the UAE Telecommunications Regulatory Authority (TRA) said it would allow VoIP through du and Etisalat, but only for local calls. In 2008, both du and Etisalat stated that they were ready to roll out the technology; and in 2009, the UAE’s telecoms regulator was in discussions with the providers about introducing VoIP. In April 2011, Farid Faraidooni, chief commercial officer of du, said that he hoped to make VoIP available later in the year.

So, where are we now? Bear with us, it’s complicated. The TRA abandoned its never-ending deliberations early in 2011, announcing that, though it still considered using VoIP an offence, it wasn’t going to police it. It expected Etisalat and du to do the policing instead, saying: “The licensees [Etisalat and du] will have the right to block traffic, but the TRA does not mandate the licensees to exercise this right.”

Meanwhile, director general of the TRA Mohammed al Gahim said he was working with Skype and other providers to establish an official service. Rouzbeh Pasha, Skype’s head of market development, denied this. For almost all users, Skype is still blocked. Frustrated operators can only recommend that users complain to their internet providers. But in the back streets of Dubai, there’s a thriving business in unlicensed VoIP shops. Locals squeeze into a cubicle in a tiny shop to use a commercial VoIP service. When a Reuters reporter visited, local workers told him that they were paying a tenth of the international rates to call home in Kabul. The shops are, literally, speakeasies.

Why is this important? The UAE is running an experiment in how to hold back the tide. TeleGeography calculates that one in seven international calls is a Skype call, and the demand in the UAE would be much higher: 80% of the citizens are expats, many unable to afford operator international rates. UAE’s two licensed operators are facing an exaggerated version of the problems facing all voice carriers. Etisalat still made a fourth quarter net profit of $193 million, compared with a profit of $545 million in the same period a year ago. Fitch Rating attributes its continuing ability to make this profit partly to the slow pace of VoIP. That’s supported by the TRA: “Do not expect prices to fall drastically just because voice over IP services are launched,” it warned when Etisalat unveiled plans for its ePlus VoIP service in October 2011. The DRA should know – it sets call rates.

Buried in the legalese on the TRA’s website, there’s good news for non-UAE licensed equipment suppliers: if you want to install the equipment for VoIP over your corporate customer’s networks, that’s not illegal. They just can’t use it afterwards.

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