A look at budgeting within Emirates Telecommunications Corporation

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Emirates Telecommunications Corporation (ETISALAT), can be described as one of the biggest as well as the most successful corporation in the region of Middle East, it has the power over the telecommunications industry in the UAE. If such an innovation measure had been applied to Etisalat, therefore, they would have hesitated on the fact that the value proposition of Etisalat was very breakable. They were doing trading in telecommunication services, an area in which they did not have any special barriers to entry. They would not block others from getting into it in the coming future. They did not have any rights on it. So it was clear that lots of others would rush into this, as was the case, and the early profits will be effected very quickly.


As we can see Etisalat accounting system is very solid and more accurate than anybody can imagine. They are adopting strict rules and regulations, no place for mistakes. And the results are obvious for everybody. Even if assets are intangible, it is possible to gauge success in innovation activities. If for example, a company invests in employee training. Etisalat publishes a measure that shows the percentage of its total revenues that come from new products.

In 1976, five years after the United Arab Emirates became one country, an organization was established and in a twenty years period of time, this corporation changed the UAE into one of the most highly developed countries in the field of telecommunication. As a service provider it is being ranked at the top of the entire Middle East service providers. Further, its use is also a far ahead of some western service provider companies. However, presently the United Arab Emirates is enjoying an advanced telecommunications state of the art infrastructure, particularly weighed against other countries in the Middle East region. It has often been noticed as the "most wired" country in the region of Middle East. Moreover, Etisalat ownership is formed as 100% UAE, which is divided into 60% government and 40% private sector. ( [1] )

Etisalat is so far, the only telecommunication service provider in the United Arab Emirates. It is offering the entire full line of the corresponding communication services, beginning from the standard line plant telephone service into providing the right complex data transferred technology. Moreover, the working conditions in Etisalat are still challenging and contain an outstanding professional skill. ( [2] )

In UAE, the Emirates Telecommunications Corporation (Etisalat) offers telecommunication services within the United Arab Emirates (UAE). Which was the former telecom monopoly offers (at the end of 2006) traditional fixed-line services were within (1.28 million customers), moreover, GSM-based wireless network serving (5.5 million subscribers), Internet service (660,000 users), and data services. Etisalat E-Vision unit provides digital cable TV, and its e-Marine group installs and maintains submarine cable in the Arabian Gulf region. Etisalat additionally operates call centers also provides research along with education in the telecom field. On the other hand, the UAE government has on its custody more than half of Etisalat public shares in addition to control a majority of its board of directors.( [3] )

The UAE has a distinguished status in the field of telecommunications as its achievements are reaching the quality and standards of the developed countries. The demands for telecommunications facilities in the UAE are growing at a phenomenal rate. This sector is controlled by the local Emirates Telecommunications Corporation (ETISALAT). ( [4] )

Over the past few years, telecommunications in the United Arab Emirates (UAE) have been developing at a rapid pace. The UAE Government considers expansion of the telecommunications sector to be a priority; as a result, it is one of the quickest growing parts in the economy. The most promising sub sectors within this sector include cable TV, mobile communication services, fiber optic communication equipment, and packet switching systems. .( [5] )

Etisalat has put up a world rank telecommunications infrastructure moreover it is self-sustaining, with sufficient resources for innovative investments in provincial projects for instance the recently launched Thuraya mobile satellite service, as Etisalat is a main shareholder in Thuraya Company.( [6] )

Financial Reports:

The financial report is written a document which quantitatively illustrates the financial physical condition of such business enterprise. This consists of an income statement as well as a balance sheet, besides often also comprises a cash flow statement of the said business firm. Furthermore, financial statements are typically accumulated on a quarterly as well as annual basis.

Etisalat are preparing all kind of financial reports such like:

Balance Sheet

Income Statement

Cash Flow Statement

Shareholders' In Changes Of Statement

Good financial reports should tell something about the future. Moreover, that is something most people do not understand. Therefore, they think that they are purely historical. Thus, everybody is having the idea that traditional accounting looks at past transactions, such as sales and borrowing, and focuses on physical and financial assets, resulting in narrowly based corporate reports that do not provide investors and policy-makers the information they seek. In reports, look for:

Inconsistency between earnings and cash flow.

Positive earnings and negative cash flow for two or three quarters. It can happen one quarter, but if it goes on, this is a very bad sign.

Increasing earnings and decreasing cash flow. This is a sure mark that there is somewhat wrong among the numbers.

Furthermore, these financial reports are prepared on a quarterly basis and reviewed through mutually the internal as well as external auditors in order to submit into its Board of Directors. However, these reports are being prepared also in annual basis in order to submit into the shareholders at the time of the meeting of the General Assembly, which is generally having its yearly meeting during March of each year.

Accounting System:

As we are aware there are many types of accounting system. However, accretion Basis Accounting is the most frequently used accounting technique, which indicates income when has been earned, along with expenses when has been incurred, seeing that opposed to cash base accounting, which indicates income when has being received as well as expenses when has being paid. Underneath the accrual manner, business firms do encompass several cautions as to when income as well as expenses are acknowledged, although there are regulations prevailing the detection. Additionally, business firms are requisite to create realistic estimation adjacent to revenues that are noted down nevertheless might not be gotten, labeled as a bad debt expense for such an instance.

On the other hand, the bookkeeping carrying out of recording sales along with expenses merely when cash is essentially got or being paid out, seeing that opposed to accumulation basis. Normally cash basis bookkeeping is so simpler than accumulation basis bookkeeping, excluding to make securing financing more complicated. Also it is called cash method of accounting.

Moreover, in Emirates Telecommunications Corporation (ETISALAT), the bookkeeping which is performing of recording sales as well as expenses on an accumulation basis intended for long-term assets also on a cash basis used for short-term assets.

Furthermore, Etisalat is giving a 30 days period to it subscribers in order to settle their dues, before taking any action against their accounts. However, this period can be extended into 3 months for Government Accounts. This is besides, that Etisalat is collecting an advance payment for individual and commercial subscriber when they are applying for a new service or while buying any telephone equipment from it.

Moreover, for settle the dues of its expenses, Etisalat is giving itself a period of 3 months to settle all of its debts.

Budgeting Process:

Budget is an enumerated predicting of a personal or even business firm's income as well as expenses predictable for such period in the coming future. However, capital budget is an arrangement to funding long-term expenditures, such as used for fixed assets in the vein of facilities along with equipment as examples. Therefore, the cash budget is a prediction of expected cash receipts along with disbursements intended for a particular period of the same time.

Etisalat budgeting process is expected to become more systematic in the days to move toward as it is at the present following a new computerized system of budgeting. Etisalat is adopting on their system a separate budgeting policy for their operating and capital budgets.

Under the new system, preliminary budgets for 2004 and 2005 will be prepared in advance so that plans and programs can be formulated on the basis of a long-term perspective. The new system also replaces the predictable manner of categorizing the budget into items as well as chapters also follows a method based on the basis of requirements by the other Etisalat branches along with departments as per performance in addition to programs.

It has been set a three-year arrangement to move from the old system toward the new budgetary system. Etisalat Board of Directors has approved the plan, which is being put into implemented in three phases and the necessary regulations are approved. Etisalat had hired external auditor administration consultants to assist in the accomplishment of the new adopted system.

Yearly, Etisalat Board of Directors has to verify the yearly budget furthermore approved it. Beginning from other Etisalat department which are raising their budget into their branch management and then these branches are sending it into Etisalat Corporate Financial Department.

Types of Funds:

The types of funds at governmental accounting usually include eight types of funds: general, besides special, along with debt service, also capital, in addition to the enterprise, as well internal service, also trust, plus agency. These types are investigative of accounting measures to be utilized along with the task of every type of them.

Etisalat revenues are coming from rental charges of its service equipment, standard fees of its service, hiring charges of some of its services, charges for usage of its services (local and international Telephone calls), installation charges and provision of its services. This is besides, the interest revenues for its accumulated funds at the banks.

Etisalat major expenditures are wages, salaries, depreciation, purchasing of fixed assets, operating expenses, utilities expenses, dividends and bad debts.

Managing Etisalat Budget' Interest Conflict:

The function to deal with conflict remains a significant concern for numerous organizations. Etisalat intervention as a process or WordBooster

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Technique of resolving Etisalat budget issues represents an essential shift from the normal financialWordBooster

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Processing framework, through its emphasis on formal budget's interests along with accounting procedures, towards further of an advance finance approach reliable among the principles of financial management.

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The decline of financial procedures means with the desire of management might want to be reminded that Etisalat budget's interests are not essentially identical through Etisalat; that despite the refuse in low sales along with other forms of other business activities, budget conflict still needs to be managed; along with that financial management philosophies could devalue the 'messy realities' of managing accounts procedures.


Etisalat is looking onward to new opportunities along with innovative challenges. It will optimistically face the future without complacency. Etisalat will work hard to develop a better future. A customer oriented, quality-based service request will be the principal management system of Etisalat. To grow from a local company to a global enterprise, Etisalat is ready for the bigger challenge ahead in the coming millennium.

Etisalat changed United Arab Emirates as a country into one of the mainly advanced countries in the region within the business of telecommunication world. As a service provider it is being ranked at the top of the whole Middle East service providers. Further, its service is also a far ahead of some western service provider companies. However, nowadays the United Arab Emirates is enjoying an up to date telecommunications infrastructure, particularly measured up to neighborhood countries in the area. Etisalat has regularly been referred same as the "most wired" situation in the Region of Middle East countries. Moreover, Etisalat ownership is formed as 100% UAE, which is divided into 60% government moreover 40% private sector.

Emirates Telecommunications Corporation (ETISALAT) is anticipated to proceed in a professional manner by means of its own country. Alternatively, this involvement has to be followed within its local country social, economic in addition to legal mandates. Therefore, Unethical actions could jeopardize the right of Etisalat to exist and be headquartered in the country.

Etisalat is accountable towards its shareholders, customers along with their society. However, Shareholders are waiting for the organization to offer the best possible returns on their investment. Consequently, Customers expect quality goods as well as services at competitive prices in addition to the maintenance of a steady supply of needed products. Alternatively, Etisalat also expects to be treated fairly furthermore honestly on an ongoing basis. As a result, Society expects Etisalat to engage in legitimate business activities that useful of the groups to which they are responsible. Otherwise, It is believed that through doing hence the Etisalat might enhance the well-being of society at extended. Hence, perhaps the two most essential issues towards society are how Etisalat treats workers plus the area to which they affect the environment.