17 January 2006
When Bahrain's top telecommunications authority meets in a few weeks time to give its views on the sector's performance last year, it is likely to highlight some major changes over the last 12 months.
The 2006 annual Development Review Panel of the Telecommunications Regulatory Authority (TRA) will convene on February 5, 2006. It will then present the results of a series of independent meetings with industry figures and other relevant participants. The panel's three experts will cover the academic, regulatory and financial aspects of the sector.
Chaired again this year by Professor Martin Cave, director of the Centre for Management Under Regulation at the UK's Warwick School of Business, the other two members of the panel will be senior research fellow at the US Centre for Digital Strategies Robert Bruce, and Ian Martin, a senior telecommunications analyst at ABN AMRO.
Established in 2002, the TRA is accountable to the Bahraini public, rather than the government, despite also being a legal enforcer of telecoms laws. This independence from the administration is to enable it to be a transparent sector watchdog.
The TRA uses consumer advisory groups to gauge what improvements need to be made in specific areas, such as provider dominance in certain markets. The authority was mandated with helping achieve full market liberalisation, which was in place by July 2004, leaving Bahrain with the most liberal telecoms sector in the region.
As the sector's main actor, and formerly the state telecoms outfit, the Bahrain Telecommunications Company (Batelco) has made some major investments and changes in its infrastructure over the past year.
Batelco currently dominates the mobile market it shares with MTC-Vodafone, which entered Bahrain in 2003. With the two competing to provide the latest mobile services available, MTC-Vodafone moved fast to build the infrastructure that allowed it to be the first to provide its customers with enhanced data rates for global evolution (EDGE) and other services thus spurring Batelco to offer the same.
Now, a third licence could be awarded in 2006.
Bracing for this new competition, Batelco is planning to increase its investment, with a planned BD50m ($132.6m) for improving broadband infrastructure, new data centres, investment in Falcon cable systems and additional base stations. In addition, it has also earmarked BD1.1m ($2.92m) for further training and development of its workforce. Meanwhile, wireless hotspots are popping up in cafes, the airport, hotels and elsewhere.
Sweden's Ericsson has also signed on to help upgrade Batelco's GSM core, radio and service networks, and will expand the company's current capacity to 650,000 subscribers.
The number of mobile subscribers in the country totalled 725,876 as of June 30, 2005, and though MTC-Vodafone has sped up development in the sector and the two rivals had fully integrated their infrastructures by July 2004, Batelco, with 523,000 subscribers, clearly retains the advantage.
As for the internet, Batelco competes with up to 16 smaller companies as an internet service provider (ISP), and reduced its prices by two-thirds at the beginning of the year while halving its rates for broadband business usage.
Internet users in Bahrain totalled 48,210 in mid-2005, leaving a great deal of room for growth. Though the kingdom does exercise some censorship over viewing certain sites, by regional standards particularly, Bahrainis enjoy rather unrestricted access.
At the same time, ISP licences are cheap and easy to get. The TRA has said that there will be no limit on the number of service providers set, and more are expected to enter the market in 2006. With more people working from home, demand is growing and costs are expected to fall further with new infrastructure and investment across the sector.
Some smaller service providers recently told OBG that they were interested in leasing infrastructure from Batelco, which will be investing BD21m ($55.74m) on internet services over the next two years. This would mean guaranteed returns for Batelco on its investment while allowing the smaller providers to offer services directly to subscribers without making unrealistic investments in infrastructure.
No plans for this have been announced, however, and it remains to be seen if Batelco would be receptive to such an idea.
In the whole Middle East and North Africa region, only Jordan's telecoms market rivals Bahrain's in terms of liberalisation though major changes in legislation have been taking place throughout the region, and it is set to overtake Asia-Pacific in terms of penetration by the end of 2006.
With its commitment to competition and transparency, it seems the Development Review Panel will likely have good news to report in February, along with its new recommendations.
When Bahrain's top telecommunications authority meets in a few weeks time to give its views on the sector's performance last year, it is likely to highlight some major changes over the last 12 months.
The 2006 annual Development Review Panel of the Telecommunications Regulatory Authority (TRA) will convene on February 5, 2006. It will then present the results of a series of independent meetings with industry figures and other relevant participants. The panel's three experts will cover the academic, regulatory and financial aspects of the sector.
Chaired again this year by Professor Martin Cave, director of the Centre for Management Under Regulation at the UK's Warwick School of Business, the other two members of the panel will be senior research fellow at the US Centre for Digital Strategies Robert Bruce, and Ian Martin, a senior telecommunications analyst at ABN AMRO.
Established in 2002, the TRA is accountable to the Bahraini public, rather than the government, despite also being a legal enforcer of telecoms laws. This independence from the administration is to enable it to be a transparent sector watchdog.
The TRA uses consumer advisory groups to gauge what improvements need to be made in specific areas, such as provider dominance in certain markets. The authority was mandated with helping achieve full market liberalisation, which was in place by July 2004, leaving Bahrain with the most liberal telecoms sector in the region.
As the sector's main actor, and formerly the state telecoms outfit, the Bahrain Telecommunications Company (Batelco) has made some major investments and changes in its infrastructure over the past year.
Batelco currently dominates the mobile market it shares with MTC-Vodafone, which entered Bahrain in 2003. With the two competing to provide the latest mobile services available, MTC-Vodafone moved fast to build the infrastructure that allowed it to be the first to provide its customers with enhanced data rates for global evolution (EDGE) and other services thus spurring Batelco to offer the same.
Now, a third licence could be awarded in 2006.
Bracing for this new competition, Batelco is planning to increase its investment, with a planned BD50m ($132.6m) for improving broadband infrastructure, new data centres, investment in Falcon cable systems and additional base stations. In addition, it has also earmarked BD1.1m ($2.92m) for further training and development of its workforce. Meanwhile, wireless hotspots are popping up in cafes, the airport, hotels and elsewhere.
Sweden's Ericsson has also signed on to help upgrade Batelco's GSM core, radio and service networks, and will expand the company's current capacity to 650,000 subscribers.
The number of mobile subscribers in the country totalled 725,876 as of June 30, 2005, and though MTC-Vodafone has sped up development in the sector and the two rivals had fully integrated their infrastructures by July 2004, Batelco, with 523,000 subscribers, clearly retains the advantage.
As for the internet, Batelco competes with up to 16 smaller companies as an internet service provider (ISP), and reduced its prices by two-thirds at the beginning of the year while halving its rates for broadband business usage.
Internet users in Bahrain totalled 48,210 in mid-2005, leaving a great deal of room for growth. Though the kingdom does exercise some censorship over viewing certain sites, by regional standards particularly, Bahrainis enjoy rather unrestricted access.
At the same time, ISP licences are cheap and easy to get. The TRA has said that there will be no limit on the number of service providers set, and more are expected to enter the market in 2006. With more people working from home, demand is growing and costs are expected to fall further with new infrastructure and investment across the sector.
Some smaller service providers recently told OBG that they were interested in leasing infrastructure from Batelco, which will be investing BD21m ($55.74m) on internet services over the next two years. This would mean guaranteed returns for Batelco on its investment while allowing the smaller providers to offer services directly to subscribers without making unrealistic investments in infrastructure.
No plans for this have been announced, however, and it remains to be seen if Batelco would be receptive to such an idea.
In the whole Middle East and North Africa region, only Jordan's telecoms market rivals Bahrain's in terms of liberalisation though major changes in legislation have been taking place throughout the region, and it is set to overtake Asia-Pacific in terms of penetration by the end of 2006.
With its commitment to competition and transparency, it seems the Development Review Panel will likely have good news to report in February, along with its new recommendations.
© Oxford Business Group 2006
