Building bridges

Key battle lines continue to divide Bahrain’s incumbent operator and the TRA as the two organisation’s work to further develop the country’s communications network.

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Building bridges Gert Rieder, Batelco CEO, says the telco is strengthening its enterprise division with the recruitment of a raft of new managers.
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By  Roger Field Published  October 7, 2009 Communications Middle East & Africa Logo

Gert Rieder, CEO of Batelco’s Bahraini operation, is committed to building bridges with the country’s telecoms regulator following a series of open disputes that have pushed the relationship between the two organisations to breaking point.

But despite Rieder’s approach being less combative than that of his predecessor Peter Kaliaropoulos, who is now the company’s group CEO, some major battle lines remain between the incumbent and the TRA.

Rieder, who headed up Sunrise Telecom, a full service provider in Switzerland, before becoming CEO of Batelco’s Bahrain operation in April, says that he has already made some headway in improving the relationship between incumbent and TRA, mainly by encouraging dialogue between the two organisations.

“Of course there has been change. Me being a different person brings in change,” he says. “We have had some good progress over the past month or so with more consultation and dialogue and that is basically the only thing we ask for.

“Instead of getting a piece of paper followed by feedback and an order, we believe in dialogue and trying to understand to create a win-win situation.”

Despite this approach, tensions continue to simmer over into public rows over a few issues that have long been a bugbear for Batelco, including the TRA’s commitment to local loop unbundling, mobile number portability, and to compel Batelco to allow other licensed operators (OLOs) to access Reliance Globalcom submarine landing station in its building.

These issues reveal a fundamental difference in the mindset between the two organisations, with Batelco accusing the TRA of forcing it to compete on an uneven playing field, and the TRA insisting that it is simply trying to stimulate competition and dismantle the incumbent’s dominant position in Bahrain.

No longer dominant

Rieder insists that Batelco should no longer be considered the dominant player, and complains that the company is not allowed to compete effectively with its main rivals, Zain Bahrain and STC, for example by being able to offer bundled packages.

 “I have to ask for approval for even the smallest weekend promotion on the mobile side while my friends in Zain can basically do whatever they like, whenever they like,” Rieder says.“I cannot compete equally on mobile. Whenever I want to use the strength of our company in putting together bundled packages I got a clear rejection from the TRA.

“After losing close to half the mobile market you cannot be described as market dominant anymore,” Rieder says. “We have lost about 80% of the IDD market to VoIP and card players and now have about a 20% market share and we are still being quoted as being market dominant by the country’s regulator.”

Rieder also says that the telecoms sector in general is facing an increase in regulation that the TRA is attempting to “push” on to the market.

“Over the last half year or so the amount of activities the TRA wants to push into the market has significantly increased and it is getting to a level where it is basically unrealistic for operators to follow along those roadmaps,” he says.

In particular, Rieder points to mobile number portability and local loop unbundling as initiatives that he views as having little merit in the Bahraini market, and as being difficult to implement in the timeframes mooted by the TRA.

Furthermore, Rieder says that the introduction of MNP is questionable in a market with 1.4 million mobile subscribers and a mobile penetration rate of 131%, and he casts doubts on reports that the TRA hopes to implement MNP this year.

“Number portability is like everything else, a very IT and technically related solution. To have a fluid process from a customer approaching one operator to be able to move a number automatically is not that simple.

“We need to upgrade our systems significantly on the IT side, and Zain and STC will also need to do it. It is something that takes time. At the moment we don’t even know what the approach is going to be like. We are in a consultation process at the moment.”

While Batelco’s competitors might argue that the incumbent is simply worried about losing customers if MNP is introduced, Rieder insists that this is not his main concern. He argues that the Bahraini market may be too small to sustain number portability, and also that the country’s 230,000 post-paid subscribers – the category that tend to make most use of MNP – represents a minority of the country’s overall mobile customer base.

“If you take a look at other markets where number portability has been put to the market, it is very seldom that it changes the market dynamics a lot,” the Batelco boss says.

“MNP is usually seen as having more of an impact on the post-paid side but the Bahrain market is mainly pre-paid. With the amount of money you would need to invest to enable number portability and the number of post-paid users in Bahrain, you could ask the question, is it necessary?”

Fixed line competition

Similarly, Rieder also questions the need to introduce local loop unbundling, given the size of the market and the fact that Batelco already offers wholesale services to other ISPs at prices agreed by the TRA.

“We question sincerely if there is any need at all for LLU. I have not met one of my competitors on the operator side who at this point in time have stated that they plan to invest in LLU,” he says.

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