Lack of internet competition could hinder Bahrain's economy

Greater internet competition is necessary for Bahrain to create a service-based economy, report claims

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By  Roger Field Published  November 29, 2007

Bahrain's Telecommunication Regulatory Authority (TRA) has called for greater competition in the country's internet sector, following the completion of a study it commissioned in August 2007.

The report, which was intended to assess the case for promoting internet competition through the introduction of local loop unbundling (LLU), found that if Bahrain's government is to fulfill its aim of creating a successful service based economy, it will need to develop a more competitive telecom industry that delivers high-speed broadband services at lower prices.

Bahrain is comparable with other Middle Eastern states in terms of broadband take-up, but its performance is below par if judged against international markets, the report found. Speeds were found to be low, and prices for high-speed business broadband services above average for competitive markets.

In further grim reading for Bahrain's government, the report stated that in the short term, infrastructure competition from alternative network providers, such as fixed wireless licensees, is unlikely to produce a fully competitive broadband market.

Furthermore, Bahrain's incumbent telecom operator Batelco needs to make its internet wholesale products more ‘fit for purpose', particularly in relation to speeds and technical parameters, the report added.

"TRA agrees with the report for the need to build on the current wholesale internet products offered by Batelco in order to allow further development of access based competition," Alan Horne, general director, TRA said.

"TRA believes that this, along with competition which is likely to develop from the national fixed wireless licensees, will lead to more choice and lower prices for broadband products in Bahrain."

Based on the conclusions of the study, the TRA has decided to take a ‘wait and see' approach to the introduction of LLU in Bahrain and will further assess the situation with the release of its final recommendations of the ‘Strategic and Retail Market Review in March 2008.'

The consultants that produced the report held discussions with Bahrain's main operators, service providers and representatives of the business community. They also visited representative sites within Batelco's network.

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