Dubai Needs Cheaper Telecom Rates To Become Global Financial Hub – Expert

The UAE, specifically Dubai requires a much more competitive telecommunications sector in order for it to move up its standing as a global financial hub, a senior expert has said.

Speaking at the Future Cities Forum in Dubai, Ashok Aram, CEO, Middle East and Africa at Deutsche Bank, said that the current telecoms rates were “way too high”.

The UAE is extremely well-connected; a recent study released by UN agency International Telecommunication Union found that the country has the highest amount of international internet bandwidth per internet user (around 52,000 bits per user) in the Middle East region.

The country also almost doubled its internet bandwidth between 2012 and 2013.

However, the report also found that prices in the UAE are quite high, with the Emirates ranking as the second most expensive for fixed-broadband prices in the GCC, following Saudi Arabia.

Currently, the UAE has a duopoly with Etisalat and du the only telecom providers allowed to operate.

“Telecommunications is one of the key factors supporting the ecosystem of a financial hub… While the dividend returns on du and Etisalat are high – no doubt, competition is required,” Aram said.

Discussing the other requirements for a financial hub, he stressed that Dubai and the UAE need the support of a strong domestic economy.

“The capital markets are not strong enough at present. Things are happening in the UAE, Saudi Arabia and Qatar – there is consolidation and investments are coming in, but probably not as fast as we would like it to,” he said.

Dubai currently ranks 14 among the top financial marketplaces in the world, according to Marios Maratheftis, chief economist at Standard Chartered Bank.

Speaking at the event, Maratheftis explained that any city requires four aspects to become a global hub including the right business environment in terms of issues such as regulations; good infrastructure; market access and good talent.

“Dubai already had good infrastructure, but the challenge comes in terms of market access. The capital markets have to develop across the UAE as a whole,” he stated.

“Once you have the first three, the last one, people, will automatically come in,” he added.