Bahrain's Batelco mulls options on regulator price cuts

Bahrain’s Batelco mulls options on regulator price cuts

Bahrain Telecommunications (Batelco) has yet to decide whether to appeal against a regulator ruling ordering it to slash various interconnection fees it charges rival domestic operators, a top executive told Reuters on Tuesday.

May 17, 2012 11:14 by Reuters

As the former monopoly, Batelco has control over most of Bahrain’s fixed telecoms infrastructure and other operators lease this to sell services such as landline phone connections and home broadband to their customers, with “wholesale” income providing 11.2 percent of Batelco’s group first-quarter revenue.

The Telecommunications Regulatory Authority (TRA) has now cut these wholesale fees to boost competition, having found that some of Batelco’s tariffs “are not fair, reasonable and non-discriminatory”, it said in a statement on its website.

“Once we have had the opportunity to analyse the full content, we will decide the best way forward,” Rashid Abdulla, Batelco Bahrain chief executive, said in an emailed statement to Reuters.

The new discounted rates will be effective from June 1 unless Batelco appeals against the ruling, which instructs the government-controlled firm to cut its fixed broadband and fixed line infrastructure leasing fees by up to 26 and 46 percent respectively.

Batelco must also slash its international phone line lease prices – by 28-68 percent to other Gulf Arab countries and by 41-45 percent to Europe, United States and parts of Asia.

The order represents another setback for Batelco, which has reported declining profits in seven of the past eight quarters and is pursuing foreign acquisitions to offset falling home revenue.

Bahrain’s telecoms sector is arguably the most liberalised in the Gulf, with three mobile operators – Batelco, Kuwait’s Zain and Viva Bahrain, an affiliate of Saudi Telecom Co – as well as about 10 Internet providers serving a population of about 1.3 million.

Batelco has a 45 percent share of Bahrain’s mobile subscribers, according to Global Investment House, with Zain and Viva each claiming about 28 percent.

Zain and Viva were not immediately available for comment. (Reporting by Matt Smith; Editing by Firouz Sedarat)