'Etisalat will evaluate the equipment, speed, network and suitability of the systems to be installed. The MoU will be for six months,' says an industry source. The 3G technology will allow cellphone users to access the internet at a speed of 2 megabit a second and download multimedia files.

A tender is expected to be issued by the fourth quarter of 2002 for a contract to supply the 3G technology.

Etisalat has allocated a budget of AED 4,000 million ($1,090 million) for the project, which also includes the supply and installation of a new GSM network - the internet protocol (IP).

The IP network will be built around packet switching technology that will eventually replace the circuit-switched networks that are the current industry norm.

Packet switching is based on the fragmentation of content into separate parcels that are dispatched and reconstituted at the receiver's end. Unlike circuit switching, no single circuit is kept open for the duration of a transmission, allowing for larger volumes of data to be carried out more rapidly over a network.