The chief telecoms investment officer of Dubai state investment vehicle, Emirates Investment Authority, Kaj-Erik Relander, has said that royalties levied on UAE telecom operators Etisalat and du are not sustainable.
He argued that other royalty…
The chief telecoms investment officer of Dubai state investment vehicle, Emirates Investment Authority, Kaj-Erik Relander, has said that royalties levied on UAE telecom operators Etisalat and du are not sustainable.
He argued that other royalty programmes around the world have also been prone to failure. “If you look at the worldwide phenomenon, one of the outcomes is that it’s not a sustainable policy,” adding that he felt the UAE royalty system would change soon.
Relander was backed in his call for change by Mohammed Omran, chairman of Etisalat. He argued that in the UAE the playing field between his company and du was not level.
He said: “Our royalty is very high compared to international standards, while du now has not paid any royalty, which puts us at a disadvantage.”
Omran continued. “We have talked to the Government and said that they need to review the system in order to have fairer ways to charge the royalties.” He would prefer if the royalties were reinvested into du and Etisalat.
About one third of Etisalat’s annual net profit is claimed as a royalty charge by the UAE Government, while du has provisionally set aside 50 per cent of its profits for royalties but has not yet transferred the funds.