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Why Are Mobile Data Charges So Expensive In Dubai?

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There are a number of examples, as per below, where data is up to seven times cheaper in neighboring countries like Egypt, Jordan, and India than it is in Dubai. The cost of providing that data in the UAE is more expensive due to business costs of the fiber networks, and in addition, the population is relatively small in the UAE compared to India and Egypt for example, so the economies of scale for the providers are less. 

However, it is true that the telecoms industry in the UAE operates under a duopoly with the two providers being Du and Etisalat. Under this economic model, the end user doesn’t end up with the best deal. Last year, the government introduced a cap on mobile data charges in the UAE.

Etisalat charges AED 100 for 1 GB, That Will Get You 7GB in India

In Jordan 10GB will cost you 1 Dinar or 5 AED

One Reddit user offers an explanation for the higher charges in Dubai and says that they will come down eventually… although that comment was three years ago

Screenshot 2017 01 08 09 06 04

What can change to improve competitiveness and reduce the cost of data:

There are three things that can change

  • Innovation: The current operators can innovate from within, a disruptive force could emerge or something like Google Fiber could enter the market
  • Competition: A third telco license could enter the market, the government could issue a tender for a new provider and global operators like Vodafone or O2 could enter, so could the likes of Mobily and Zain

This isn’t a slight on Du and Etisalat, the economics of the UAE are very different to the counties mentioned above. If you compare the data charges with similar sized populations and GDP figures counties such as the Nordics or Ireland, there isn’t that much difference. 

Data charges are a global topic of conversation following the leak of Verizon 

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And it’s not just data, an Apple iPhone can set you back around AED 3,000, where as a smart phone with similar functions such as the Xiaomi Mi 5 will cost around AED 300 in India.

Xiaomi Mi 5

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