Bahrain calls for greater telecoms competition

Head of regulatory body says operators Batelco and Zain operate 'cosy duopoly'.

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By  Rob Corder and Reuters Published  February 29, 2008

Bahrain will sell a third mobile phone licence this year to boost competition and bring down prices, the head of the telecom regulator said on Thursday.

Bahrain's Batelco and Kuwait's Zain operate two networks in the island state, which has a population of just over a million people.

The Telecommunications Regulatory Authority (TRA) has put pressure on Batelco, which has about 70% of Bahrain's mobile market, to cut prices and open its network to competitors.

"The underlying prices of mobile calls have not fallen," TRA Director Alan Horne said told newswire Reuters by telephone. "Some critics have said we have a cosy duopoly."

A meeting of Batelco shareholders on Wednesday illustrated just how cosy the current arrangements have become. The company reported that 2007 gross revenues increased to $777.4 million with net profits increasing to $269.2 million - a whopping 34.6% profit margin.

Bahrain would likely invite bidders in September and sell the licence by the end of 2008, Horne said, adding that a third operator would help reduce tariffs by increasing competition.

Horne said once a third licence is sold, Batelco would no longer have to seek regulator approval to alter charges for telephone calls.

"Batelco will no longer have to have their tariffs approved before setting them," he said.

The number of mobile subscriptions in the Gulf Arab state rose to more than 975,000 by the end of September, the TRA said.

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