Arab Advisors Group
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Bahrain sets its liberalization blueprint.
Thursday, December 12, 2002

The government of Bahrain issued a new telecom law No. (48) in October 2002. The law stipulates the opening up of the communications market in Bahrain to other companies and ends Batelco's current monopoly.

December 12, 2002 -

Bahrain's recently enacted telecom law sets the final liberalization timeline for the communications sector in the country. The market is anticipated to be fully competitive in 2004. The establishment of an independent regulator is expected to initiate the liberalization process.

A newly released report, "Bahrain's new telecom law: the Bahraini communications market is set for a whole new competitive era." was released to the Arab Advisors Group's ( Strategic Research Service subscribers on Dec 11, 2002. The report fully details the liberalization timeline. This new report comes on the heals of five analytical reports from the Arab Advisors Group that fully examine the dynamics of the Bahraini communications markets. These include " Bahrain Communications Projections Report 2002" and "Bahrain-Internet & Datacomm landscape report 2002", released in September and October 2002 respectively.

"The Telecommunication Regulatory Bureau will be financially and managerially independent. The bureau will be in charge of solving disputes between operators and also between the operators and agents. In addition it will be responsible for the granting of any new license and setting up the conditions and responsibilities of any new entrant." Arab Advisors Group's analyst, Hala Baqain wrote in the report.

"With the Bahraini communications market approaching a period of competition and liberalization, a strong regulator that is attuned to its roles and responsibilities is surely needed in the market. Proper competition requires a regulatory body that will spot any anti-competitive practices or unwarranted cross subsidies and act against them." Ms. Baqain added.

The Bahrain communications market will be fully liberalized by 2004. The GSM and the Internet markets are the first segments to open up for competition. The Bahrain Internet and Datacomm Landscape Report 2002 revealed that the Internet access revenues for the year 2001 stood at US$ 21 million, contributing around 4% of Batelco's total revenues. The report has 30 plus pages with more than 30 detailed exhibits on the market. The Bahrain Communications Projections Report 2002, which exceeds 40 pages in length, shows that the Arab Advisors Group projects Bahrain's GSM subscriber base to reach 625,000 in 2006, a penetration rate of 77%.

Multiple national fixed, ILD, VSAT, paging and radio trunking licenses will be granted after the 1st of January 2004.

"The highlight of the liberalization of the Cellular segment in Bahrain involves the possibility of granting one or more Mobile Virtual Network Operators (MVNO) licenses." Ms. Baqain noted.

The law stipulates competition-enabling issues that are quite progressive and new to the Gulf region. Such issues include number portability, which is entitled to all users of voice services (fixed and cellular). The term "number portability" means the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another. Another privilege that is granted to users is the freedom to chose the service provider, this will entitle a subscriber to one network to chose a service from another network that it has an interconnection agreement with.

The Arab Advisors Group's team of analysts in the region has already produced more than 135 reports on the Arab World's communications markets. The reports can be purchased individually or received through an annual subscription to Arab Advisors Group's ( Strategic Research Service. To date, Arab Advisors Group has served more than 60 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.

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