du to Ditch Sub-100Mbit/s Deals in 2017

FRANKFURT -- Ultra-Broadband Forum -- UAE operator du says it will stop selling broadband services below 100 Mbit/s next year as it focuses on the rollout of much higher-speed offerings.

The state-backed company, which competes against bigger rival Etisalat in its domestic market, launched a 1Gbit/s service for residential customers last year and will make a 100Mbit/s service its starting offer in 2017, according to Jasim Alawadi, du's vice president of network infrastructure and services.

"We are planning by next year that all low speeds will be discarded from the network," he said during a keynote presentation at Huawei's Ultra-Broadband Forum in Frankfurt this week. "The proposal will be from 100 Mbit/s and above."

It is unclear whether customers currently using lower-speed services will benefit from an automatic upgrade as part of the overhaul, but the move could put pressure on Etisalat to make similar changes to its consumer offerings.

Alawadi reckons consumers given a taste of higher-speed connectivity will quickly demand even faster services in future and says he is also under pressure from the government to make network improvements in advance of Expo 2020, which the UAE will host.

du claims to have commercialized a 20Gbit/s offering in the last few weeks, although details of that remain scanty.

Investments in fiber are also designed to support du's mobile strategy as it prepares for the introduction of 5G services in the next few years.

"In 2015 we agreed internally that each and every mobile site should be backhauled by fiber," said Alawadi. "We believe you cannot launch 5G efficiently without having fiber -- if you rely on microwave it will be a waste of time and money."

Fiber currently extends to about 30% of mobile sites, according to Alawadi, but should reach 80% by 2019.

du is also investing heavily in software and virtualization technologies in an effort to bolster efficiency and address new customer requirements.

The current target is to "virtualize" 30% of the network, although du has not indicated when it aims to reach this target. "Why only 30%? There are still some challenges and parts you cannot virtualize because of the lack of clarity in some vendor roadmaps," said Alawadi.

du claims to have been exerting pressure on vendors in this area and is currently in discussions with a few suppliers about the virtualization of its evolved packet core functionality.

"I've told Huawei you cannot decouple virtualization plans from the SDN [software-defined networking] part and that if these don't move in parallel we'll be investing without seeing real benefits," said Alawadi.

du is already at an advanced stage of vendor negotiations regarding the deployment of SD-WAN technology and Alawadi is optimistic it will be able to introduce an SD-WAN controller in the first quarter of 2017.

"Once we have done that we can open platform for IoT [the Internet of Things] for people to enjoy services," said Alawadi.

At the transport level, the company has begun testing a transport SDN solution and expects this to be "live to use" by the third quarter of 2017.

Last year, du reported a 4.3% increase in net profit, to 3.86 billion UAE dirhams (US$1.05 billion), on 0.8% growth in revenues, to AED12.34 billion ($3.36 billion).

— Iain Morris, , News Editor, Light Reading