EMIRATES TELECOMMUNICATIONS CORP IN CONSUMER ELECTRONICS (UNITED ARAB EMIRATES)

Euromonitor International January 2012

EMIRATES TELECOMMUNICATIONS CORP IN CONSUMER ELECTRONICS (UNITED ARAB EMIRATES)

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LIST OF CONTENTS AND TABLES

Strategic Direction ........................................................................................................................ 1 Key Facts ..................................................................................................................................... 1 Summary 1 Summary 2 Etisalat: Key Facts........................................................................................ 1 Etisalat: Operational Indicators .................................................................... 1

Company Background .................................................................................................................. 2 Production .................................................................................................................................... 2 Competitive Positioning ................................................................................................................ 3 Summary 3 Etisalat: Competitive Position 2010 .............................................................. 4

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EMIRATES TELECOMMUNICATIONS CORP IN CONSUMER ELECTRONICS (UNITED ARAB EMIRATES)

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EMIRATES TELECOMMUNICATIONS CORP

STRATEGIC DIRECTION
Etisalat is strongly positioned as a multi service provider and as a catalyst of change and driver of progress in terms of the development of the UAEs IT and communications infrastructure. While for decades Etisalat held a monopoly over telecommunications in the UAE, Du, a new telecom operator, entered the UAE during 2008. Since then, Etisalat has embarked on a new strategy, adopting a new style of conducting business, offering enhanced customer service and introducing innovative offers and products in order to attract and retain customers. In order to remain competitive and in a bid to continue introducing new technology, Etisalat will continue to focus on more value-added services such as specialised media content and enhanced mobile internet services. This will be very much in line with developing and future trends in telecommunications. Etisalat is also focusing on its international operations and global expansion in order not to limit itself to just one country. The company has so far invested in 18 countries.

KEY FACTS
Summary 1 Etisalat: Key Facts Full name of company: Address: Tel: Fax: www: Activities:
Source:

Emirates Telecommunication Corporation Shaikh Zayed Street, Etisalat Building PO Box 3838, Abu Dhabi +9712 628 3333 +9712 631 7000 www.etisalat.ae Comprehensive telecommunications provider (voice and internet)

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Summary 2 Net sales Net profit Number of employees

Source:

Etisalat: Operational Indicators 2008 2009 AED29.4 billion AED8.5 billion n/a AED30.8 billion AED8.8 billion n/a

2010 AED31.4 billion AED7.6 billion 10,400

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EMIRATES TELECOMMUNICATIONS CORP IN CONSUMER ELECTRONICS (UNITED ARAB EMIRATES)

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COMPANY BACKGROUND
The Emirates Telecommunication Corporation, commonly abbreviated to Etisalat, was founded in 1976 as a joint stock venture between UK-based International Aeradio Limited and local partners in the UAE. In 1983, the UAE government purchased a 60% share in the company and the remaining 40% was publicly traded. In 1991, the UAEs central government issued Federal Law No 1, giving Etisalat the right to provide wired and wireless telecommunications services in the UAE as well as in other countries. Etisalat has an international investment unit operating outside the UAE. This division manages the companys stakes in telecommunications operators in various countries including Afghanistan, Benin, Burkina Faso, the Central African Republic, Gabon, India, Indonesia, Iran, the Ivory Coast, Egypt, Niger, Nigeria, Saudi Arabia, Sudan, Tanzania, Togo, Sri Lanka and Pakistan. In the UAE, Etisalat is headquartered in the Emirati capital Abu Dhabi and remains the leading telecom operator in the country despite the entry of Du, the countrys second telecom operator, in 2008. Etisalat operates in 18 countries across Asia, the Middle East and Africa and has more than 135 million customers. The company offers mobile and fixed-line voice and data services to private individuals, commercial enterprises and international telecommunications companies, ISPs, content providers and mobile phone operators. Etisalat also offers managerial and technical training, SIM card manufacturing, payment solutions, clearing house services, peering, voice and data transit and submarine and land cable services. Etisalat has 525 roaming agreements connecting 185 countries enabling BlackBerry, 3G and voice roaming. In 2009, Etisalat reported annual net revenues of AED30.8 billion and net profits of AED8.8 billion. On 10 February 2011, Etisalat reported net annual revenues of USD $8.4 billion (AED31.9 billion) for 2010 and net profits for 2010 of USD US$2.1 billion (AED7.6 billion) Etisalat is also a major investor in Thuraya, a leading global satellite geo-mobile communication system. During 2009, the Etisalat group received seventeen industry awards, including three for innovation and three for customer service. It has been named Best Overall Operator in the Middle East six times since 2006 and was named Best International Carrier at the World Communications Awards in 2008. In October 2010, due to concerns regarding the security and the provisioning of legal interception for Blackberry non-voice services, the Telecommunication Regularity Authority of the UAE banned Etisalat and Du from operating all Blackberry e-mail, internet and messenger functions until an agreement was reached a month later.

PRODUCTION
In 2010, Etisalat launched its all-inclusive eLife triple play service, which bundles three services together including landline, broadband internet and subscriber television. All of this was offered in advance of the FIFA 2010 World Cup, which aimed to attract and benefit football fans who wished to keep abreast of the developments at the World Cup. As the centrepiece of this offer, the company announced that its subscribers would have the opportunity to watch 2010 FIFA World Cup in high definition for free through Al Jazeeras sports channels. Etisalat also launched 3D TV services in 2010 to all its triple play eLife customers as well as to its E-Vision customers for no additional cost. All customers subscribed to any of Etisalats

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service packages were provided with high-quality 3D broadcasting, provided that they are running 3D enabled TV sets. This last move by Etisalat in 2010 succeeded in positioning the UAE among top five countries in the world and first in the Middle East and North Africa for 3D TV. Etisalat is also developing a fibre-optic infrastructure in the UAE, and this project is planned for completion by 2011. Etisalat was first telecommunications provider in the UAE to introduce HSPA and HSPA+ broadband technology, which provided downlink speeds of up to 42MBps to users. It is also the first company in the Middle East region to roll out Long Tern Evolution (LTE) mobile broadband technology, which is considered to be the next big wave in 4G wireless technology.

COMPETITIVE POSITIONING
Etisalat is still learning to cope with competition following the recent the entry into the UAE of rival telecommunications operator Du. Prior to Dus entry into the UAE, Etisalat held a monopoly on the UAE's mobile phone, landline and internet communications, allowing it to place relatively high prices on its services. Pressure on the Etisalat has risen since the entry of Du and this pressure has stepped up in recent months as the Etisalats share of domestic mobile telecommunications has fallen to 63%. The company added just 10,000 new mobile phone customers during the third quarter of 2010, compared to 159,800 new customers for Dus mobile phone business during the final quarter of 2010. Dus advantage has been its capacity to cut costs and introduce much more competitive prices for telecommunications, although the quality of the network coverage on Dus mobile phone services remained rather weak in its early post-launch days. Etisalat continues to boast significant advantages for its subscribers compared to Du, with an extensive network of roaming agreements exceeding 300 networks for post-paid customers and much of these roaming agreements now apply to its pre-paid customers as well. The companys marketing highlights its excellent voice and data applications and its use of WAP, GPRS, 3G, MMS, Push To Talk and BlackBerry makes it the first choice in telecommunications among Emiratis. Etisalat continues to hold the first mover advantage in telecommunications in the UAE and has a stronger reputation for service quality. Etisalat is therefore able to maintain positive public perceptions about its infrastructure and its overall capabilities. Etisalats churn rate of subscribers rose from 15% in the early days of Dus operations in 2007 to 25% in 2009. This churn rate declined again to 17% during the first nine months of 2010. In addition to the competition it faces from Du, Etisalat has also been negatively affected by the rise of voiceover internet protocol (VoIP), a technology which was initially banned in the UAE as well as many other Middle Eastern countries. In order to meet the growing needs of its customers in terms of offering digital platforms and services, Etisalat announced early in 2011 that it would implement over 200 services and features for internet protocol television (IPTV). The company is calling for strong partnerships between telecom providers, media companies and hardware vendors in order to provide premium content on connected devices. Etisalat continues to maintain attractive branding and communication strategies which focus mainly on its strong association with the UAE and its competitive edge as a national operator rooted in local traditions and culture. Etisalat has engendered an image of a company which is able to respond quickly to the needs of consumers from various different segments. It has advertising campaigns and promotions running throughout the year and it also sponsors a variety of events, including the Abu Dhabi Economic Forum, which takes place annually.

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It is nonetheless difficult for Etisalat to compete with Dus young and fresh brand image, which speaks the language of the UAEs significant youth segment. Du rolled out a major branding campaign early in 2011 which was designed to get closer to consumers and dispel any negative perceptions about the brand in the UAE. In response, Etisalat called an advertising pitch early in 2011 with the aim of launching its own massive corporate advertising campaign by the end of 2011. Summary 3 Category Etisalat: Competitive Position 2010 Volume share 55%

Rank 1

Voice/internet services
Source:

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