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
Etisalat charges AED 100 for 1GB data in UAE which is INR 1800. Surprisingly, with the same amount you can get 7GB data in India. #WTFFacts
— Anil Kumar (@anilyzethis) November 1, 2016
In Jordan 10GB will cost you 1 Dinar or 5 AED
You can get 10 gb of data for 1jd in Jordan but in Dubai I have to sell one of my kidneys for like 50 mb
— sabrin (@nxrbxs) January 6, 2017
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
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.