Why UAE should open VoIP, and How they can do it without losing Telco Revenue!

In this article, we have described our experience with VoIP services in UAE, why UAE should lift the ban on VoIP, and finally, a disruptive suggestion for Telcos(Etisalat/Du) on how they can open VoIP without losing their revenue. Share this story if you agree that the VoIP ban should be lifted.

Our team at mesibo (a Singapore-based real-time communication startup) was recently at GITEX 2021 in Dubai, one of the largest technology events in the Middle East, and it was an amazing experience. It was also exciting as there are not many in-person events happening anywhere in the world due to the pandemic.

The reason why we chose to write this article is that after GITEX, we have been flooded with inquiries from companies we met in UAE. They all loved the mesibo demos, the ease of using APIs and many of them want to use mesibo in their apps. However, one of the common queries we received was, is it possible (& legal) to use mesibo call and conferencing APIs in UAE? Honestly, we didn’t know the answer, especially because of the confusing state of VoIP in UAE which is not black or white, but rather grey, some apps work, but most mainstream apps do not, and to add to the twist, some mainstream apps work from some locations (say, from expo 2020) but not from anywhere else. So all we could respond to them was, that the mesibo respects local laws and the usage is subject to the local laws.

This raises an important question: what’s going on with VoIP in UAE, and why is it high time UAE should open VoIP?

H onestly, I love Dubai and Abu Dhabi, and more than that, the rulers of UAE, are true visionaries and a fantastic set of people. They made UAE excel in many fields — finance, tourism, art, education, healthcare. Dubai is also ranked 16th globally for ease of doing business. The startup culture is growing, with plenty of accelerators and an impressive boom in venture capital-backed startups in recent years. We would love to be part of this ecosystem and hope to set up an office in UAE soon.

However, given all the positives of UAE, it’s a bit disappointing that I can’t call home from a country that is so advanced unless I use local telcos (Etisalat and Du) and one of their licensed apps like BOTIM. There were some talks recently on TRA lifting the ban but that never happened except for selected apps during the pandemic. This VoIP ban not only impacts the individuals but also startups which cannot integrate such services in their offerings. It seriously curbs innovations and disruptions. As Tala al Jabri, an Abu Dhabi-based VC told CNBC,

“a permanent lift of the ban can go a long way in promoting the UAE as a destination for disruptive firms who almost always need to transact with teams across borders”

and a similar opinion was tweeted by Dr. Habib Al Mulla, founder, and chairman of Baker McKenzie and a prominent personality, and as noted by Arabian Business.

A glimpse into the current business model

Both Etisalat and Du allow a few selected third-party licensed apps through their network by subscribing to their internet calling plans (50 to 100 AED per month). The rest of the apps are blocked and the reasons cited for such restrictions are that they are not meeting the country’s licensing requirements, security concerns due to encrypted calls, and possibly an unspoken one, revenue loss.

Why is this not a good business model (and not as successful)?

Before that, let’s look at it from a different angle. As reported by Waheed Abbas in Khaleej Times, one of the top UAE daily, “The usage of virtual private networks (VPNs) is growing fast in the UAE…“. In another article, Waheed noted that the demand for VPNs continues to grow in the UAE and will exceed last year’s figures in 2021.

Why such growth in VPN usage? It is not difficult to guess if you are living in UAE. Most people don’t like these licensed apps from telcos. Instead, they illegally use VPNs to make VoIP calls over popular apps, the apps that their friends and family across the world are using. Don’t take my word for it, here are some eye-opening (and some funny) replies to Du’s tweet promoting their licensed apps to their subscribers — as reported by CNBC

“No one uses Voico or whatever it is called. You want me to ask my 85 year old father to download this onto his phone do you and set it all up? Ridiculous” (tweet)> “We cant ask everyone to download this new buggy app. Just unblock whatsapp and FaceTime and lets move into the 21st Century. The telecommunications industry is holding the UAE back” (tweet)

Well, the licensed apps model has kind of failed as people have managed to get over these restrictions. It not only defeated the purpose but also came with a serious side effect, the growing volume of VPNs usage and the potential security threats. Imagine, VoIP and corresponding VPN usage giving people an opportunity to access other services banned in UAE. Authorities can have a tough time keeping track of these with the burgeoning VPN usage. The opening of VoIP would drastically cut down on VPN usage and this would help the authorities to track VPN usage for illegitimate purposes.

However, the current situation seems to be a deadlock. Telcos want their revenue, and subscribers want their choice of apps. So what’s the solution?

The Solution — Give License to Users, Instead of Apps

As simple as this sounds — it’s disruptive and a win-win. Moreover, it is simple to implement as Telcos will not have to change their business model. Let’s dive a little deeper to understand!

Both Etisalat and Du charge for internet calling plans (50 to 100 AED per month) and allow usage of some licensed apps by opening ports and IP addresses used by these apps. This allows them to generate revenue.

However, this dual control is unnecessary (and is backfiring). Instead, they should open all ports (maybe all UDP ports) and all IPs for users who are paying for internet calling. This way they still get to maintain the control and hence the revenue will not be lost creating a win-win situation for them and subscribers. The subscribers can use the apps of their choice while telcos are free from maintaining the apps, and the ever-changing provisioning for apps.

This model will not only help Telcos to sustain but also increase their revenue. The reason is that more people will be inclined to use this model instead of using VPN (some pricing strategy could help to kill or discourage VPN).

Additionally, telcos will not have to share revenue with the licensed apps. I assume that’s the likely arrangement, but feel free to correct me.

Let’s realize that, it’s 2021 and good telecom services are no longer a luxury. Let’s hope UAE Telcos read this article and analyze if the suggestion works in their favor.

Thank you for reading this article. Feel free to share, and comment if you have any suggestions!