News Column

Etisalat lines up insurance

July 24, 2014

Shereen El Gazzar

Protection offered against theft and accidental damage

Etisalat wants to insure your smartphone for Dh250 a year.

The UAE's biggest telecoms company said yesterday that it had begun offering smartphone protection plans against theft and accidental damage.

Priced between Dh120 for six months' cover or Dh250 for 12 months, the plan protects smartphones against accidental damage including cracked screens, theft, liquid damage and other defects that are not covered under a traditional warranty.

The plan is offered on new smartphones bought at Etisalat stores.

"The new product is not for profit, but we are trying to satisfy our customers by providing them with services that are relevant to them," said Khaled ElKhouly, the chief marketing officer at Etisalat UAE.

The worldwide coverage plan is in partnership with AXA Insurance, which has similar deals with telecom operators in Europe.

"We've seen there's a real testimony in the UAE market. Mobile phones are becoming more fragile and expensive," said Alexis de Beauregard, the chief officer- marketing and retail product offering at AXA Insurance.

"Smartphone penetration in the UAE is close to 100 per cent. Sometimes we find people with two smartphones. The insurance is against accidents or damage and against theft, which happens to a lesser extent here."

Although Mr de Beauregard declined to reveal the business model of the plan with Etisalat, he said that the insurance covers smartphones, which tend to range in price between Dh1,600 and Dh3,600. Under the insurance policy, a device can either be replaced or repaired for the customer, depending on the nature of the damage.

Analysts said that insurance for smartphones is becoming a common practice in many markets. In some cases the operator would remove the need for an underwriter and would offer the service directly.

"The way we use our smart device for daily activities from taking pictures to keeping fit is continually increasing the risk of accidental damage and given the cost of certain handsets, the requirement to insure is definitely there," said Paul Black, the director of telecoms and media at International Data Corporation (IDC) Middle East and Africa.

"The value we now place on our smartphones means that insurance is often a prerequisite for many people. Our phones are with us day and night, so for operators offering insurance on these expensive devices is definitely a value-add for many of its subscribers," he added.

This week, Etisalat reported a 19 per cent year-on-year rise in first half profit of Dh4.5 billion.

Telecom operators such as Etisalat are facing pressure on the voice side of their business as Skype and Viber increase in popularity.

The loss is offset by the high penetration of smartphones, which bring data revenues.

For more stories covering the world of technology, please see HispanicBusiness' Tech Channel

Source: National, The (United Arab Emirates)

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