Bahrain's Batelco profits up 20%

Bahrain monopoly telecom operator, Batelco reported profits of BD 34.2 million, a rise of 20% from the same period in 2001

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By  Massoud Derhally Published  August 7, 2002

Batelco the Bahrain monopoly telecom operator reported a total income of BD 91 million for the first half of 2002, marking a 9% increase over the same period a year ago. Profits at the telecom operator reached BD 34.2 million, an increase of 20% from the same period in 2001.

The company’s chairman and minister of transport, Shaikh Ali bin Khalifa Al Khalifa said, “These figures represent a business success story for Bahrain and a flourishing info-communications market.”

“Batelco has performed well and its conservative approach to investment, both at home and overseas, has paid off, especially when comparing the company’s financial health with many of the big-name telecoms operators in the US and Europe. A financially strong Batelco is able to continue its generous track-record in donating 2% of its profits every year to educational, cultural, charitable and environmental causes,” Al Khalifa added.

The company experienced buoyant growth in the number of mobile subscribers that have reached 350,886, a figure that equals have the island’s population, representing a penetration rate of 52%. Mobile usage continues to be the largest revenue force for the company accounting for 38% of the overall gross revenue for the first half of 2002, up 7% over the same period in 2001.

In addition to mobile telephony, Batelco relies on its Internet and data portfolio that has raised BD 14.5 million from its local operations and BD 8.2 million from its joint ventures in Kuwait, Saudi Arabia, Egypt and Jordan.

Joseph Braude, an senior analyst at Pyramid Research, who follows the IT and telecom market in the Middle East, believes that lower-income first-time mobile users who opt for pre-paid services have been a major contributor to the company’s success.

In a new report by Pyramid Research, Braude says, “The impact of a higher post pay contribution will boost Bahraini ARPS (average revenue per subscription) levels relative to other Gulf states in the years ahead.” Batelco slashed its mobile prices by as much as 40% on handset rentals and an average of 26% per minute usage.

Pyramid’s report concludes that the government of Bahrain is likely to end Batelco’s monopoly in early 2003, “possibly at the initiative of one of the Kingdom’s entrepreneur in partnership with a regional or international player.”

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