Fixed broadband services will see "significant growth" in the United Arab Emirates (UAE) over the next five years, with revenues predicted to increase from US$ 695mn in 2010 to US$ 1.01bn by 2015, according to a new report from Pyramid Research.

The strong growth is attributed to both increasing broadband penetration in the country and to the switch to a nationwide all-fibre network by 2011.  The UAE's telecom market can look forward to healthy but not dramatic growth over the next five years, the report adds, with a key change to be the switch from copper to fibre networks that is currently underway and due to be completed next year.

Out of the country's two telcos, du initially took the lead with fibre deployment, according to Hussam Barhoush, Senior Analyst at Pyramid Research: "However, Etisalat has already caught up and surpassed its new rival in terms of fibre rollout: Abu Dhabi was the first capital in the world to be all fibre, as Etisalat connected the city to the 'elife' FTTH network. 

"As well as providing a boost to broadband revenue, the change will lead to growth in pay-TV adoption, as operators use advanced VAS to make IPTV services significantly more attractive than those of satellite operators," he added.

As the penetration of broadband services increases, it will become critical for operators to provide value-added services (VAS) in order to raise their monthly average revenues per user (ARPU).  The next major opportunity for telecoms equipment vendors in the UAE is expected to be LTE, which the research firm expects both du and Etisalat to deploy within the next three years.