Skype VOIP calls from UAE and Middle East

VoIP technology provider aims to become a legitimate way to communicate with customers and suppliers and is currently gearing up to set up a representative office in the Middle East before the end of the year

Skype's Voice over Internet Protocol (VoIP) technology enables 600 million users around the world to place phone calls via the internet for free or from computer to phone, for pennies on the dollar, far less than traditional landline and mobile phone rates in the UAE.

Skype, however, is banned in the UAE and its website, www.skype.com, is blocked by authorities.
Rouzbeh Pasha, Skype's Head of Middle East and Africa discuss with Gulf News daily the future of Skype in the Middle East and a possible presence in the UAE amid newly relaxed regulations by telecom authorities.

Pasha was a panellist yesterday participating at the Middle East Communications 2010 conference in Abu Dhabi.

In March, the Telecommunications Regulatory Authority (TRA) announced that it had revised for the first time its policies in order that "licensees may offer VoIP as a technology." The TRA said in a statement that "offering VoIP is considered a regulated activity which requires a licence. Therefore, only licensees may provide VoIP services... However, they [VoIP companies such as Skype] can always approach and collaborate with the licensees to legally provide their services." What is Skype's view on the latest TRA announcement and does this mean that expatriates should look forward to legally using Skype service in the UAE soon?

Obviously, this is going in the right direction. However, it is a small step. If you look at the potential UAE has, it is great. From our point of view, it's not really about any one country specifically. I'm in charge of a big region, [the] Middle East and Africa; it's 1.3 billion people with 300 million Arabic-speaking people.

If you look at what Skype brings to these people, this is an amazing product, it helps people get close to their loved ones. If you look at the average number of contacts people have on Skype, it's less than 10.

These are people who you want to see their face. Thirty-four per cent of all Skype calls are video calls. On special occasions such as Ramadan and New Year, more than 60 per cent of all our calls are on video. This helps [our users] stay in contact with people who matter.

Can you confirm that Skype is in talks with TRA or etisalat, du, Thuraya and Yahsat, to bring your VoIP services legally to the UAE through a partnership that would see a portion of Skype revenues stay in the country?

Usually we don't comment on any financial discussions we have with government agencies. However, we do work with partnerships.

We are a Luxembourg-based company. All of our servers are based there. We do work with local partners. We don't comment until we have something we can report on. Our strategy is to globally work with partners. A lot of potential partners have reached out to us. We're in discussions with quite a few.

There are reports that suggest Skype could be up and running freely in the UAE within the next two years. Is that optimistic?

I don't want to speculate. The sooner that everything can be fine, and... Skype can be everywhere, that will be better. But we will have to have relationships in place.

We are working toward that goal. It has to make sense. It is working in every part of the world and it should be working in the Middle East and Africa. But I don't want to put a timeline on it.

Is it your opinion that if a less expensive alternative was given to expatriates to call abroad, more Skype phone calls would be placed, creating higher revenues that would be shared in a partnership with a traditional UAE telecom partner?

How people communicate has really changed. People used to communicate only through voice calls. The device you hold in your hand now does a lot of other things including video. You can read the news on it, talk to a colleague, and also because of this development people aren't confined to voice any more.

Up to 50 per cent of calls depending on the occasion are done on video, a paradigm shift from low-quality voice on the other end. This is what technical innovation has brought us. If you don't upgrade your business model, you will end up losing the whole lot.

Working with a company like Skype helps future-proof your business model. In the short term you would be able to make additional money on what you are doing. You would be looking at making more money on data than on pure voice.

Pure voice is a disappearing thing. As more tools become available to you, you choose more online things. It's about the quality. The volume increases so much that you are making more money. This is an opportunity for... operators to make more money.

[Skype] is an application that drives the user to go get a data subscription, broadband subscription or mobile subscription so that they can use it. It's like you have a fast car and then going through the toll road to use it.

This region is as promising as any other region especially if you look at how the ICT trend is growing in the Middle East and Africa. The average speed of internet access is increasing. Some of the youngest and most tech-savvy people are living in this region. It really is a high growth region in all aspects of online services and Skype is one of them.

There are reports that Skype is already hunting for office space on Shaikh Zayed Road in Dubai to set up [its local] headquarters in the UAE. Can you confirm this?

We're looking at setting up a regional support office in the Middle East. It will be a representative office for Skype to support marketing and develop business activities in the region. We will announce soon which country it's going to be. We're not commenting yet where it will be.

We are an online company so that whatever we do is online. A geographical presence is to reach out to partners. It's not going to be an operation out of here, not like Blackberry selling out of an office. This will be closer to partners in the region. It will be this year, sometime this year. This is for us to show the long-term view we are taking in the region. Even though our software is available in every corner of the world, we have very few offices.

Dubai has always been a business hub and in most recent years has become an international destination to conduct commerce. Does Skype believe that less expensive calling rates internationally would improve affordability and access to other global centres for small businesses, exponentially increasing the flow of capital and trade into the UAE?

Totally. It is one of the main reasons that Skype can benefit the region and this country in particular. If you can use Skype as an official tool to communicate with customers and suppliers, it can give you a tool to be more efficient.

In economic development, communications is one of the key elements. This is really a global trading hub. You have suppliers in the Far East and customers in the Far West. You have to communicate with people. The easier you can communicate the more efficient you can be.

In the long run, it is one of the basic components for economic development and one way for businesses to become more profitable and more sufficient. If that happens, it does benefit the total economy of a country.

As the largest VoIP provider on the planet, what kind of numbers has Skype been enjoying in recent years?

We recorded 8 per cent [of international calling minutes] in 2008, 12 per cent in 2009. Skype was one of the companies driving the increase in total volume. Not only did we increase our share, but we also helped increase the total volume of calls. We now have 600 million users globally.

We just celebrated the concurrent logging in of 20 million users at the same time. This shows you the power of the technology. We do want to be seen as a company that breaks down barriers, this is one of the driving principles Skype has. We want users to feel part of the global community. If you are online, this is a tool that enables people to communicate wherever they are. This is the first time you can do it so cost-efficiently. Here this is really using the power of the internet to offer these services at a very low cost.

With an estimated 65 per cent of the Middle East population under the age of 30 constantly connected through handheld devices and laptops, do you see Skype emerging even stronger in coming years over traditional telephone platforms?

Skype is going to be one of the strongest platforms for communication online. It will allow users to do more online communication rather than single-device use. You log in, you check your e-mail, your news, you Skype your friend, do whatever you want. This region has great potential. The ICT is catching up now, it is improving and is great. People can get online faster than before.

VoIP technology provider aims to become a legitimate way to communicate with customers and suppliers and is currently gearing up to set up a representativeoffice in the Middle East before the end of the year

600m: number of Skype users worldwide representing roughly nine per cent of the world's population
20m: Skype recently celebrated a milestone in its history with 20 million Skype users logged on at the same time
34%: of all Skype callsare video calls
54b: Skype's share of 406 billion international calling minutes logged last year worldwide
7: Skype was founded sevenyears ago in Luxembourgh

India inflation cools slightly

India’s year-on-year inflation cooled slightly in April, official data showed Friday, easing pressure on the central bank for a swift hike in interest rates.

Wholesale price inflation, the country’s main cost-of-living measure, slipped to 9.59 percent last month from 9.9 percent in March — broadly in line with market expectations, the commerce ministry said.

The Reserve Bank of India hiked its key interest policy rates by 50 basis points in March and April and has begun unwinding monetary stimulus measures used to shield the country from the global financial downturn.

Earlier this week, the bank said it would take a “calibrated” approach to further rate increases amid uncertainty about the fallout on India from the eurozone debt crisis.

“With the external situation highly uncertain and India’s financial system highly vulnerable to sudden capital outflows, now is not the time to aggressively withdraw liquidity and hike borrowing costs,” Nikhilesh Bhattacharyya, economist at Moody’s Analytics, said in a research note.

Slower-than-expected industrial output growth of 13.5 percent in March as the government withdrew stimulus measures also has reduced pressure on the central bank to raise rates swiftly, economists say.

The central bank is expected to wait for the onset of the monsoon rains that sweep the country from June to September to see whether they bring down food prices before taking any further tightening action.

Last year’s rains, the weakest in nearly four decades which hit agriculture output, sent the cost of food soaring and caused huge hardship for India’s poor masses.

The food price inflation index clocked up a still-strong 16.87 percent year-on-year rise but analysts expect food prices to ease amid hopes of a good harvest.

However, some economists said there could be a move by the central bank to tighten monetary policy before its July 27 policy meeting.

“We expect the Reserve Bank to maintain its tightening stance and we don’t rule out an inter-policy meeting (tightening) action,” Shubhada Rao, chief economist at India’s Yes Bank, told AFP.

The central bank could increase policy rates by a further 150 basis points this financial year to March 31, 2011 if inflation pressures do not ease, economists have forecast.

DU PREPARES UP FOR VOIP SERVICES FROM UAE

Emirates Integrated Telecommunications Company, the UAE telecom operator known as du, said yesterday that it is building a base to offer Voice over Internet Protocol (VoIP) services but has not yet zeroed in on a partner.

The company said net profit before royalty for the first quarter of this year more than quadrupled to Dh194 million, compared to Dh47 million in the first quarter of 2009. Revenue for the period was Dh1.58 billion, a 36 per cent increase over the same period last year and 3 per cent more than the fourth quarter.

"We are very pleased with the results. It shows our continued growth," said Osman Sultan, du's Chief Executive Officer, during a conference call yesterday. "It's a growth that has translated into a record revenue for us," he said.

An increase in the number of subscribers has been the main driver behind the record revenues, Sultan said. The number of active mobile subscribers increased by 262,000 in the first quarter, bringing the total active mobile subscriber base to more than 3.7 million.

Proposition

Du is currently "building a VoIP proposition", but hasn't decided on a partner yet, Sultan said. VoIP telephony allows users to make phone and video calls and send text messages using the internet at costs significantly lower than those charged by traditional network operators. Etisalat recently slashed international call costs to Dh0.50 per minute on landlines.

"We are now exploring different routes," Sultan said. "We will be announcing this year a value proposition for the enterprise and residence markets," Sultan said.

The extraordinary general assembly of shareholders agreed to the proposal to increase the company's capital to Dh4.57 billion by selling 571,428,571 new shares on a rights basis for Dh1.75 each.

The rights shares will be priced at 33 per cent discount to Monday's closing price (Dh2.55) on the Dubai Financial Market and at 38 per cent discount compared the price before the rights issue announcement last month, Sultan said.

The proceeds of the issue, about Dh1 billion, will be used to increase the company's capital in order to position it for future growth.

Capital structure

"This Dh1 billion that the company will be collecting is not needed for deadlines. I think we need to plan for a three- to four-year road map. We need to have a better capital structure," he said.

"The company has the highest growth among all telecom operators in this region and we anticipate remaining on the high end for 2010."

Asked about potential expansion plans outside the UAE, Sultan said there were "no intentions for any acquisition or any plans to go outside the UAE". The company's primary focus is to grow further in the country, he said

Etisalat slashes international call rates to 50 fils per minute

In a move to offer the best international calling rates to landline customers, Etisalat has slashed the International Direct Dialing (IDD) rates to 50 fils per minute from May 10 till August 9, 2010.

All UAE landline users can call anywhere in the world, anytime, at just 50 fils per minute during this period, Etisalat said in a statement.

The offer is applicable for all landline users in the UAE, benefiting both, e-Life as well as non-Etisalat landline users. Users, who do not have an Etisalat landline connection, can also benefit from the reduced rates through the Etisalat Select Service that is offered free of charge; the user only pays for usage.

Available in two customised packages, the promotion offers additional flexibility to the customers to choose the most appropriate package as per their requirements.

First offer: Customers can benefit from the best international calling rates of 50 fils per minute (all day), for one selected country of their choice for a flat fee of AED 20 per month. Customers can call 125 to select their preferred country and enjoy the discounted rates. Rates of all other local and international calls will remain unchanged.

Second offer: Besides reduced call rates of 50 fils per minute for a selected country, subscribers to this offer have an option to pay a connection charge of Dh1 per international call to the selected country, rather than the flat fee of Dh20 per month. Hence, customers in this plan can choose to 'pay-as-used', rather than paying a monthly fee of Dh20. Rates of all other local and international calls will remain unchanged.

Customers also have an option to switch from one offer to another, based on their utility. Customers can subscribe to this promotion by dialing 125, or by visiting any Etisalat business center or outlet in shopping malls throughout the country. Etisalat mobile customers can subscribe to Etisalat Select service by sending an SMS "ES" to "1010". For all other mobile users, they can call 800-101 and request the service.

Subscribers of special IDD tariff plans such as "Super off Peak", "Favorite Country", and "Friends & Family" can also benefit from this promotion by subscribing to the above mentioned offers. The IDD tariff plans will be put on hold during the promotion period, and customers would automatically be reverted to their original plans after the promotion.