Why telcos in UAE don’t favour opening of WhatsApp and FaceTime amid Covid-19

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Residents in the UAE have been urging telecom operators to further ease restrictions on free video and voice calls over the internet (VoIP) such as WhatsApp, Facebook Messenger, Skype and Apple’s FaceTime due to Coronavirus outbreak.

Even though the telecom operators – Etisalat and du – have provided access to remote learning applications (Google Hangouts, Microsoft Teams, Blackboard and Zoom) on the fixed network and Microsoft Teams, Blackboard and Zoom on the mobile network, they have generally blocked other popular applications.

Karim Yaici, Senior Analyst at Analysys Mason, told TechRadar Middle East that there will likely be a selective and progressive opening of VoIP apps in the UAE to facilitate communications.

He said that there are reasons that have prevented the liberalisation of the voice market in the country, a protective regulatory regime to limit competition and protect operators’ margins as well as licensing and security considerations.

“The regulator and the operators are unlikely to allow all VoIP applications in the market but there will be select applications that will be permitted in the run-up to, and during, Expo 2020. It remains to be seen with these exceptional measures, taken in time of a crisis, will soften the position of the regulator and the operators towards OTT VoIP providers,” he said.

He said that operators have been taken by surprise by the rapid take-up of ToTok in 2019 and expects operators to report a large shift of calls to the application and a significant drop in voice revenue during the first quarter of 2020.

Karim Yaici, Senior Analyst at Analysys Mason

“…The increased data usage, generated by OTT applications, is unlikely to offset the drop in voice revenue. So operators will have to think more creatively about how to further drive data usage and increase spend, for example,  by offering richer video streaming and gaming services, Karim Yaici, Senior Analyst at Analysys Mason, said.

Telcos trying to protect voice revenues

This trend is likely to accelerate as the regulator has now allowed more OTT apps, especially business apps such as Zoom and Microsoft Teams, to work for the first time in the UAE from residential lines.

 “These measures are likely to be time-limited but if the crisis is prolonged and people get accustomed to using these apps and businesses start to depend on them, it will be difficult to justify blocking them back,” Yaici said.

As long as the most popular VoIP apps such as WhatsApp and Skype are partially or fully blocked, he said that telcos can still protect some of the revenues from voice services, especially lucrative segments such as international calls and roaming.

 “This is important because the increased data usage generated by OTT applications is unlikely to offset the drop in voice revenue. So operators will have to think more creatively about how to further drive data usage and increase spend, for example,  by offering richer video streaming and gaming services,” he said.

Expo 2020 could offer a silver lining

Yaici also said that the demand for telecoms services will be stronger as a result of the current Covid19 crisis as voice and data traffic has shifted from businesses to residential lines and from outdoor to indoor usage, so it is undeniable that it will have an impact on mobile revenue with no clear compensation from the fixed business.

“Operators have potentially an opportunity to drive the awareness and take-up of new services such as gaming and encourage the upgrade of broadband services to higher speeds,” he said.

The potential impact of the Corvis19 crisis could be important without significant fiscal and monetary measures because key sectors of the local economy, such as oil, airlines, retail and hospitality, have already been hit hard in the UAE.

“Many businesses will struggle to keep operations afloat and many people will be at risk of losing their jobs and that will have a direct impact on demand for telecoms services. However, Expo 2020 could offer an opportunity to kick-off the economic recovery before year-end,” he said.


Source: TechRadar

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