DUBAI - The UAE’s telecoms regulator on Monday legalised international calls through the internet for the first time, but maintained its ban on foreign companies providing Voice over IP (VoIP) in the Gulf state.

In a long-awaited update to its VoIP policy, the Telecommunications Regulatory Authority (TRA) said it would allow licensed operators to provide international calls through the internet along with other VoIP services previously barred.

UAE telcos Etisalat and Du were already allowed to provide limited VoIP services within the country.

The TRA has licensed Etisalat and Du to offer expanded VoIP services along with newcomers Yahsat and Thuraya, both satellite service providers, Mohammed Gheyath, TRA executive director for technology development affairs, told reporters.

Popular international VoIP providers such as Skype remain barred from operating in the UAE and there are no plans to open up the market to foreign companies “for the time being”, Gheyath said, speaking at a press conference.

He said the only way for international VoIP providers to operate legally in the UAE is by partnering with existing licencees.

Internet-based calls through providers such as Skype have been deemed illegal in the UAE since 2004 and the relevant websites were blocked to protect domestic telcos’ lucrative monopoly over international calls.

However, Skype remains one of the most popular ways for expatriates in the UAE to communicate with family and friends back home, with many people using it on their computers and numerous internet cafes providing the service.

About 85 percent of the UAE's 4.5 million residents are foreigners, the majority of them labourers and low-paid service class workers from Asia. Many of them make less than 1,000 dirhams ($272) a month.

A phone call to India during peak hours can cost about 1.60 dirhams ($0.44) a minute, while a call through the internet using Skype is either free or a fraction of the cost of a conventional call.

Skype CEO Josh Silverman last week labelled the UAE’s ban "short-sighted" during a trip to the Gulf state for the Abu Dhabi Media Summit.

Silverman said Skype is in contact with the UAE government and "open to discussions" with the government and others in the region. - Maktoob