UAE telco Etisalat fined for blocking rival du’s promo texts

The UAE telecom regulator on Monday fined former monopoly Etisalat for blocking text messages that would have provided its customers with details on how to switch to rival operator du.

The penalty is a rare rebuke in the United Arab Emirates, where both operators are majority-owned by state institutions and the regulator is often seen by analysts as more interested in protecting the companies’ revenues than standing up for consumer interests.

The case comes ahead of the launch of mobile number portability next month in the country after a delay of more than five years.

This will allow subscribers to retain the same phone number when changing provider and could be a crucial tool for Etisalat and du - the only two mobile operators - in trying to lure high-value business customers and people on monthly contracts from their rival.

Etisalat is the bigger player in both of these segments and is seen by analysts as having more to lose from the introduction of the service.

Du launched a publicity campaign urging people to send a text message to a specific number to receive information relating to number portability.

Etisalat blocked this number from around Nov. 21, preventing its customers from receiving du's response, a Telecommunication Regulatory Authority (TRA) statement said.

The regulator ordered Etisalat to lift the block on Friday and on Monday issued a “Violation Decision” against the operator for failing to do so, the statement said.

The TRA separately told Reuters it had also fined Etisalat, but declined to reveal how much, adding the block was now removed.

“We regret that this happened,” du Chief Executive Osman Sultan told Reuters. “But I’m quite confident the operators will work in a good spirit to make number portability ... give a good choice for customers.”

Etisalat did not respond to requests for comment.

Du has rapidly built up market share since ending Abu Dhabi-based Etisalat’s domestic monopoly in 2007, reaching near-parity in the mobile market within a few years.

Analysts have attributed du’s growth to its more nimble pricing tariffs and marketing strategy - it was the first to introduce per-second billing, for example - and a slow response from Etisalat, with the Gulf's No.2 telecom operator by market value more preoccupied with expanding abroad.

Etisalat has changed much of its senior management in recent years, recruiting foreign heads of marketing, finance and strategy, with the new team focusing more on its domestic market, provider of the vast majority of third-quarter profit despite the company having operations in 15 countries.

Etisalat’s more competitive stance has helped it win back some mobile market share – du’s share was 46.4 percent as of Oct. 31, down from 47.2 percent a year earlier, according to Dubai-based du’s third-quarter earnings report.