New laws could open the way for foreign investors to buy in to the lucrative telecoms market in the United Arab Emirates.
The first step is legislation to move the Emirates Telecommunications Corporation (Etisalat) in to public ownership.
The law will let Emiratis and other Gulf Cooperation Council (GCC) citizens and companies buy shares in Etisalat.
The stumbling block to going public and increasing Etisalat’s capital by selling shares has been the earnings premium paid to the state – rumoured to be 50% of profits.
It seems the government has agreed to take a smaller cut to account for dividends to shareholders in order to make the capital-raising plan work for the company.
Like most countries, telecoms is big business in the UAE.
Almost 650,000 new users joined the UAE mobile phone network in the first three months of 2012, boosting the total to 12.36 million and widening the penetration ratio to 154%, according to official data from the Telecommunications Regulatory Authority (TRA), which oversees the telecom sector in the country.
Etisalat is the Middle East’s largest operator and the GCC’s third largest company.
With a market value of approximately US$20 billion and annual revenues of over US$8.7 billion, Etisalat is one of the world’s leading telecoms companies.
Growth is accelerating, as the number of new users signing up for services in the first quarter is already 110,000 more than the number joining the network in the first six months of last year.
The current 12.3 million subscribers is 1.3 million more than at the end of March last year.
The Etisalat phone, satellite TV and broadband networks have a potential market of 2 billion in the Middle East, Asia and Africa – and the company already serves customers that add up to almost double the UAE’s 7 million population.