UAE: Led by a leap in demand

14 April 1995

EMIRATES Telecommunications Corporation (Etisalat) cannot afford to sit back. With demand for some of its services rising by as much as 35 per cent a year, it has earmarked Dh 1,424 million ($388 million) for capital investment in 1995. This figure is in line with sums spent in the last few years, but there is no slowdown in sight.

'We expect at least another five years of rapid expansion,' says one equipment supplier. The current switching capacity is 700,000 lines, of which 500,000 lines were supplied by Japan's Fujitsu and 200,000 by Sweden's Ericsson and France's Alcatel. Presently, Fujitsu is working on a 33,000- line expansion and Alcatel on a 30,000-line expansion. New contracts for 78,000 lines and 50,000 lines are due this year. At least 100,000 lines of capacity will be added each year until the end of the decade. This is to cope with a more than 10 per cent a year increase in the number of subscribers; at the end of February 1995 Etisalat had 623,749.

Etisalat is frantically expanding its global standard for mobiles (GSM) to cope with the huge demand for mobile telephones. The total number of subscribers at the end of February 1995 was 98,240, which was a 35.6 per cent increase over 12 months. Etisalat says that it expects the network will be able to handle 160,000 subscribers by the end of 1995. In the meantime, with current capacity of only 100,000 lines, the company is having to put the brakes on new applications for mobile phones. Pagers are also much in demand - the number of subscribers rose by 24.7 per cent to 189,893 in the year to February 1995 and the system is to be expanded with a further 32,000 pagers in 1995.

On top of the expansion of the GSM and paging systems, Etisalat is to spend a significant portion of its 1995 investment on the installation of an intelligent network, a passive optical network and expansion of the synchronous digital hierarchy (SDN) network installed in 1993-4 by Philips Communications Systems. Finance is also earmarked for the introduction of video on demand and the expansion of automatic teller machine (ATM) services.

Budgets allocate for both an expansion of the transmission network and the plans to increase considerably the 50,000 kilometres of fibre optic cable already laid in the UAE. The fibre optic submarine link to Kuwait is at the tender evaluation stage and is due to be completed by December 1996. Etisalat is also evaluating plans to expand further the submarine cable system to Bahrain, Qatar and Kuwait and expects the project to be completed by early 1997.

A fifth Inmarsat earth station, built by Japan's NEC and the US' STC, was completed at the end of 1994. Etisalat says there are plans to build more earth stations working with various satellites in the near future. Other capital investment is directed towards the construction of modern high-technology offices, with regional headquarters in Fujairah and Ras al-Khaimah at the tender stage and bids for offices in Al-Ain and Sharjah to be invited later in the year.

Etisalat continues to make high profits - a rise of more than 9 per cent to Dh 1,242 million in 1994. There are currently no plans to alter the level of public participation in the company: 60 per cent of Etisalat is owned by the government and 40 per cent by UAE nationals. Steps taken two years ago to liberalise the sale of approved equipment appear to be the furthest Etisalat wants to go for the time being.

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