The UAE telecommunications market passed another major landmark today as Etisalat delivered a comprehensive cost evaluation to the Telecommunications Regulatory Authority (TRA). This is an obligation under the current regulatory framework, which directs Etisalat to share its product and service set costing information with the regulator for pre-approval of price changes and promotions.
Embarking on and implementing this cost evaluation study is quite an achievement as Etisalat has completed the entire study terms of reference, as issued by the TRA, in a record six months. Etisalat is a thirty-three year old company, and also the largest company in the UAE with almost 10,000 staff and over 5,000 facilities including masts, payphones, offices and other infrastructure. This made the cost evaluation an enormous undertaking which in similar cases has taken many other operators around the world more than three years to achieve.
Etisalat’s cost evaluation model is technically referred to as a ‘top down’ cost allocation tool which encompasses three separate modeling parts, including cost accounting, accounting separation and wholesale pricing. This model has been built to world best practice and standards and is in line with the TRA’s detailed 32 page guidance instructions to Etisalat on building the cost allocation system for the purposes of making regulatory pricing determinations.
Under the current Price Change Request policy framework, the regulator approves the prices of services in the UAE on the basis of either using UAE-specific costs of Etisalat’s national network or international benchmarks.
Now that Etisalat has submitted its cost evaluation model, as per the TRA’s requirements, Etisalat expects to be able to implement significant and wide-spread changes in its calling tariffs and bring greater choice to customers in the UAE. In completing this study Etisalat reconfirms its support for the ongoing development of the telecommunications sector and the numerous economic benefits it delivers to the citizens of the UAE. This is an important day for the country, and Etisalat looks forward to providing even greater value to its customers and higher levels of quality.
© 2009 Al Bawaba (www.albawaba.com)
