Bahraini.TV

Lines Are Open

by mahmood on 13/06/08 at 1:09 pm · email  · print  

Bahrain’s telephone users are expected to be the main beneficiaries of a series of reforms and recommendations to the country’s telecommunications market, which are set to bring greater competition, lower rates and better access.

On June 8, Bahrain’s Telecommunications Regulatory Authority (TRA) called for submissions from consultancy firms for proposals on developing new competition and tariff notification guidelines.

The competition guidelines are intended to provide the market with clear rules on practices that may be considered as anti-competitive and set out how the TRA will analyse allegations of anti-competitive conduct.

The second set of guidelines, dealing with tariff notification, are to be directed at Bahrain’s landline monopoly, Batelco. They will detail how the company is to ensure its compliance with its obligations and will support the objective of promoting competition for the benefit of consumers.

Alan Horne, the general director of the TRA, said the development of competition and tariff notification guidelines was essential for moving towards a more competitive environment in which regulation is progressively adjusted to better reflect market conditions. Combined with the measures to be implemented under the TRA’s recent strategic and retail market review, consumers could expect to see more competitive services on offer.

“The regulatory process therefore needs to be enhanced by strong competition and tariff notification guidelines to avoid anticompetitive practices and ensure sustainable competitive environment,” said Horne.

The invitation to tender came only three days after the TRA released the results of a comparative study on the kingdom’s pricing structures. The report, prepared by consulting firm Teligen, found that Bahrain’s landline tariffs stood up well against those in other Arab and Organisation for Economic Co-operation and Development (OECD) nations. It also found that Batelco’s charges for services were out of line with underlying costs, and international direct dial rates well above cost.

“By international standards, leased lines tariffs are not competitive,” the report said. “This is an area where ameliorations are required in order to ensure Bahrain remains an attractive business location with competitively priced services for business users.”

There was also criticism of the charges levied for broadband access, in particular for high-speed services. The cost of high-speed broadband in Bahrain is four times that of the European average, according to the study.

“High rates had a flow-on effect on broadband penetration and use, and with it on Bahrain’s ability to embrace knowledge economy,” the report said.

Alexandre Serot, the TRA’s chief economist, said the study highlighted the relative strengths and areas for improvements in the sector.

“Rapid and significant improvements for broadband and leased lines are required,” he said. “They will deliver major economic benefits for the nation.”

Competition is to be further enhanced next year, when a third operator is scheduled to enter the market. The invitation to tender for the third licence is scheduled to be called in mid-August, with final submissions due at the end of October and the winning bid to be announced early in December.

In early June, the TRA announced a series of measures to further open up the telecommunications sector, as well as pave the way for the third mobile licence.

Apart from unbundling Batelco’s control of landlines, allowing competitors to provide competitive voice and broadband services; consumers will have access to carrier pre-selection, allowing them to chose which server to use on a call by call basis to take advantage of the lowest available tariffs; and number portability for both fixed and mobile phone services.

In a move intended to speed up pricing procedures, Batelco will not have to apply for TRA approval when setting prices for mobile services and fixed international calls to selected markets.

According to Horne, the measures will strike a balance between enhancing competition and consumer welfare while not overburdening market players.