Du GSM Mobile Network, United Arab Emirates

Du is the trading name for the United Arab Emirates' (UAE) latest entrant into the telecommunications market. The Emirates Integrated Telecommunications Company (EITC) is to launch a new mobile network by the end of 2006 – this will be the country’s second network. The company is owned by the UAE government (50%), Mubadala Development of Abu Dahbi (25%) and Emirates Communications Company (25%).

These parties decided to float the company on the UAE stock exchange and recently made an initial public offering (IPO) of US$108bn, which was 167 times over-subscribed with over 225,000 investors applying for shares. There will initially be an 800 million share capitalisation (overseen by investment bank EFG-Hermes), and the shares will be listed on the UAE stock market in April 2006. Emirates Bank International and First Gulf Bank have been appointed as lead manager and co-lead manager of the offering.

Foreign investors will be allowed only 20% of the total shares in the company. Du is hoping to capture 30% of the UAE telecommunications market within three years. The company are hoping to break the years of monopoly held by the country's sole mobile network provider, Etisalat. Du will invest Dh700m (US$190m, €160m) in the new network over the initial set up period to the end of 2006.

CONTRACTORS

Nokia was awarded the contract for the supply of the entire network for Du in March 2006, following a competitive bidding process with seven other infrastructure providers. It is expected that the initial stages of roll out will be completed by the end of 2006/ start of 2007.

Nokia will provide a turnkey solution for the network, providing the entire core and a large part of the radio network for a range of services including Global System for Mobile communications (GSM) / General Packet Radio Services (GPRS) / Enhanced Data for Global Evolution (EDGE) and wide band code division multiple access (WCDMA) 3G.

Under the terms of the contract Nokia will establish Du's network operations (2.75G). This will include but is not limited to, the GPRS core; 3GPP Release 4 Nokia MSC Server System (MSS) and Nokia IP Multimedia Subsystem (IMS) solution; latest value added services platforms such as Nokia Push to talk over Cellular (PoC), Presence, Multimedia Messaging Service Centre (MSSC), and Intelligent Service Node (ISN); and the multi-technology and multi-vendor Nokia NetAct network and service management system.

Nokia is also taking a large systems integration and training responsibility. The company was chosen because of its ability to accelerate the network rollout process and to offer a total solution to the provision of the new network. Nokia will also provide a range of handsets for the network.

THE ENERGY BEHIND DU

The energy behind the company is Osman Sultan who launched the highly successful Mobinil in Egypt in 1998. He recognised the need for a second mobile provider in the UAE and took steps to establish one. A poll showed that more than 80% of people in the UAE believed a second telecommunications company would make a difference.

With the launch of Du, the UAE will have a second mobile telecoms, internet and cable television provider and will certainly introduce much needed competition into a market dominated for the last decade by Etisalat. Du is hoping to be able to compete with their rival not by price cutting, but by their superior customer service and through offering a slightly different range of services. Du wants to establish its mobile network in the major urban population centres first and then to provide an advanced fixed line network across the UAE at a future date.

Du has made a commitment to broadband services and hopes to be able to provide 'broadband everywhere' when they have completed their networks. Du has already incorporated the Tecom Telecommunications Company, which formerly operated networks in the Dubai free zone as well as the Sahm Telecom Network. Because of these acquisitions, Du already has nearly 20,000 customers, but more importantly has 500 experienced staff to operate the new network.

By the end of 2006, Du will be able to provide 85% coverage of voice, data, video and content services over its mobile network to both corporate and residential customers throughout the UAE. EITC (Du) already provides services to 20,000 residential and business customers in the free zones and Dubai Internet City, Dubai Media City, DIFC, Emirates Hills and Dubai Marina and will be providing integrated telecommunications infrastructure for many new projects, such as the Palms resort.