Arab Advisors Group
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Bahrain's well-developed market has a savvy monopoly operator. Yet, it can also sustain another operator!
Thursday, September 5, 2002

A newly released country report from the Arab Advisors Group fully analyzes the Bahraini communications market and its monopoly operator Batelco. The report shows a market that can sustain effective competition in cellular service.

September 5, 2002 -

Bahrain maybe underestimated for its small land area and population however its telecommunications market hosts one of the most profitable and successful operators in the region. Bahrain's communications market is rewarding, in yearend 2001 its total revenues exceeded US$ 450 million. Voice services, GSM and fixed, remain the mainstay services, as they constituted 68% of the Batelco's total revenues in 2001.

A new report "Bahrain Communications Projections-2002", was released to the Arab Advisors Group's ( Strategic Research Service subscribers on September 05, 2002. The report shows that the signals from Bahrain are all positive for liberalization. The healthy state of the savvy and profitable Batelco means that the government will not fear for the operator from competition. Though, new entrants may have a lot to fear from Batelco should a fair regulatory regime be absent from Bahrain. Given the higher than regional average rates for Internet, datacomm and GSM services, and the limited options for customers, we believe that these three segments may be the first to be liberalized in Bahrain.

"The demand for the PSTN services has leveled off. Batelco was able to serve the entire country by providing an integrated network that offers a wide portfolio of services. Bahrain will have marginal additions to the number of PSTN subscribers parallel to the growth of the natural households as well as businesses' growing needs". Arab Advisors Group's analyst Hala Baqain, author of the report, noted.

The 40-plus pages report, which includes 40 detailed exhibits on the market, shows that Bahraini GSM subscriber base is still growing. The number of mobile users who are between the ages of 14 and 21 has risen rapidly in the last two years, mainly due to the successful launch of the prepaid SimSim service in addition to the availability of cheaper handsets in the market. With this increase in the young generation users, the demand for personalized services such as downloading ringing tones and more sophisticated wireless Internet services will definitely increase. When implemented by Batelco, this will expand the revenue pie for Batelco and should be seriously considered by the future GSM competitor since competition will be based on competitive rates and the VAS offered. The Arab Advisors Group projects Bahrain's GSM subscriber base to reach 625,000 in 2006, a penetration rate of 77%.

The Arab Advisors Group's team of analysts in the region has already produced more than 109 reports on the Arab World's communications markets. Following the report on Bahrain, comprehensive reports on Tunisia's communications markets and Jordan and Qatar's datacommunications markets will be out shortly. 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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