The single biggest foreseeable change for the telecommunications market in Bahrain will come from the transformation of a monopoly market into one that is liberalized and open to competition, asserted Andrew Hearn, chief executive of Bahrain Telecommunications Company (Batelco) since 1991, in his address to the fifth annual Arab telecoms development forum (Arabcom) on April 22, 2002, in Doha, Qatar.
“This is ‘in sync’ with the forward-thinking changes already set in motion by the Government of Bahrain. And it means that, for the first time in Bahrain’s history, customers will have a choice of communications provider,” Hearn said.
What else does the future hold for the telecoms market in Bahrain? According to Hearn, we should not be talking about telecoms any more; rather we should talk about info-communications. “That’s the mix of telecoms, computing, entertainment, mobility and information. Because information is now a significant and ever-growing proportion of the ‘goods’ that we deliver and telecoms is the transport mechanism over which we deliver it.”
Hearn forecasted that Batelco is “facing a time of seismic change, the most significant since 1981, when the company was first incorporated as a private Bahraini shareholding company, which is now the biggest company quoted on the Bahrain Stock Exchange.” Looking forward, the introduction of competitors into the market will mean that “Batelco will have to adapt and transform itself in order to compete and survive in a liberalized market.”
According to Hearn, “We will have to axe unprofitable services and concentrate on those areas that will keep our business healthy, our customers satisfied, our shareholders happy and our employees in jobs. Of course, it means we will have to start looking at new lines of business. We will be looking at new-age, broadband, high-speed services.”
Hearn specified: “Like any company in a competitive market, our focus will be on profitable customers such as multinational corporations, large national and small-to-medium-sized businesses, which will want ever-more sophisticated solutions and applications-based services.” So what will happen to these unprofitable, but necessary, services when this market liberalizes? “Maybe incoming competitors will be required, by regulation, to join with us in contributing towards the cost of such provision? We will have to wait and see…”
In Bahrain’s new competitive environment, Batelco will not be able to subsidies one part of its business with money earned from another, Hearn explained. “For example, we have been able to keep the cost of local fixed-line phone calls down, thanks to the greater profit earned from international calls. Similarly, revenues earned from our successful mobile phone business prop-up other, less, or even non-profitable services.”
“Lessons have already been learnt from similar transitions around the world. So our government has the opportunity to study those examples and get it right first time, so that Bahrain ends up with best-in-class telecoms legislation with transparent and independent regulation with a level ‘playing-field’ that is not tilted too far in favor of either incoming competitors or incumbent,” Hearn concluded.
Batelco is a public shareholding company in which the Government of Bahrain has 40 percent, Cable & Wireless 20 percent and semi-government, financial and business enterprises and the private investors share the remaining 40 percent.
Batelco is responsible for the provision of all telecommunications and information services in Bahrain, including national and international data and telephony, internet services, mobile telephones and corporate communications systems.
In 2000, Batelco recorded a total turnover of over 150 million Bahraini dinars ($398 million) and a net profit of over BD50 million. Market capitalization is of the order of BD700 million. Batelco has an average business growth of 15 percent per annum. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
