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The UAE's telecom regulator is in discussions with the federation's two service providers to introduce VoIP, or voice-over-internet-protocol services, Mohamed al-Ghanim said in an interview in Dubai on Sunday.

"I'm in discussions with the mobile operators regarding the introduction of VoIP," said al-Ghanim, director general of the Telecommunications Regulatory Authority.

"There is a tariff-fee balancing issue that we need to address as well because of subsidies."

The UAE blocks internet-based calls through providers such as Skype and Yahoo, which it considers illegal.

Licensing issues are the reason for the ban and the authority will "upgrade our VoIP policy soon," al-Ghanim added.

The federation's two telecom providers, Etisalat and Du, have until the end of this year to reach an infrastructure-sharing agreement that will help reduce internet charges in 2010, al-Ghanim said.

Internet penetration among member states is between "65 percent and 67 percent" and "we are targeting 100 percent penetration in the next two years," he said.

Internet penetration has lagged behind the more than 200 percent mobile penetration rate because prices remain high, he added.

The federation is conducting a strategic study on the number of operators needed, al-Ghanim said.

"We are becoming more cautious about having additional suppliers of communication services in the U.A.E." to avoid hurting current operators at a time of economic crisis and to allow for continued investment in telecom infrastructure, al-Ghanim added.

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