UAE telecom operators Etisalat and Du might be "out of business" if they continue to focus on making revenue from phonecalls as opposed to data, according to the chairman of law firm Baker McKenzie Habib Al Mulla.

Speaking to Arabian Business, Dr Habib Al Mulla said calls will soon be outdated due to technological developments such as voice over internet protocol (VoIP) services including Skype and WhatsApp calls.

“Data is where Etisalat and Du need to make their investment, not on calls. Calls will be obsolete,” he said.

"If they continue insisting on making their mainstream revenue from calls, their whole business model will be obsolete. They will soon be like Kodak - out of business."

Al Mulla predicted that calls will ultimately become free of charge, referring to the public’s switch from paid text messages to free texts via WhatsApp.

“The development in tech will surpass all telecommunication companies. They used to charge around AED2 per message, but now with WhatsApp, nobody uses messages anymore. The same thing will happen with calls. It’s only a matter of time before calls will become free, whether telecommunication operators like it or not,” he said, urging them to change their approach.

“They need to change their mentality. It will not work in the 21st century with technology’s development. People will find ways, no matter how many services [they block]. Even now, if they open WhatsApp calls or Skype, people will consume more data. I fail to understand why they can’t see that. It’s obvious,” he said.

Future revenue

Al Mulla also advised the operators to focus on high internet speed for future revenue.

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“Whether you’re a business or consumer, whether you’re watching Netflix, sending documents or having conference calls, you’re consuming data whatever you’re doing. Data is the future. So if you have more speed in data, that’s where the money is going to come from,” he said.

This month, the chairman of Al Habtoor Group also urged the UAE’s mobile carriers to end their ban on WhatsApp calls. Khalaf Al Habtoor said the ban contributes to the country lagging behind the rest of the world in terms of communication.

“In a country like UAE, where we aim to always be pioneers in all we do, #WhatsAppCall should not [be] banned when it is accessible everywhere else in the world. I urge mobile carriers in the UAE to lift the ban,” he said on his official Twitter account.

Licensing requirements

The UAE’s Telecommunications Regulatory Authority (TRA) has previously said that Voice Over Internet Protocol (VoIP) must meet its licensing requirements.

While both du and Etisalat offer C’Me and BOTIM VoIP services, they said services such as WhatsApp and Skype remain unauthorised.

We invest and others are monetising

Last year, Du chief executive Osman Sultan said that while telecom companies want to reduce the price of connectivity, they are spending billions on concepts which internet players such as Facebook are benefiting from, but not investing in.

“I have to pay billions every year so that the Apples and Facebooks [of this world] can have better services that they monetise, and where [consumers] want to pay me less and less,” he told the 2017 Arabian Business Forum in Dubai.

"Today, how many videos do we receive? Years back, it was something unique to get a video. Now, almost every WhatsApp message is a video. That would require that I continue injecting billion after billion… That paradox is not yet sorted out for the entire telecom industry. We invest and others are monetising.

Sultan also predicted that internet usage will eventually be free of charge, adding that users today pays less per gigabyte compared to two years ago.

“It cannot happen overnight. Yes, it will go that way, but it will be a gliding path. In telecom, we used to invoice two things: time and distance. It was very simple. You speak from Dubai to Abu Dhabi, you pay a price. You speak from Dubai to New York, you pay a different price. You speak for one minute, you pay a price. You speak for 10 minutes, you pay a different price. That was the equation: time and distance,” he said.