2013-12-09 09:10:36 - Recently published research from Business Monitor International, "Bahrain Telecommunications Report Q1 2014", is now available at Fast Market Research
Bahrain's telecoms market is rapidly moving towards high-value wireless and wireline data services, supported by the launch of 4G LTE network services and 100Mbps fibre broadband services in 2013. We expect this to help operators offset revenue shortfalls from traditional voice services and improve their subscriber mixes, as consumers turn to postpaid contracts to subsidise the purchase of LTE-enabled smartphones. We retain a positive outlook for the take-up of these services based on strong take-up of mobile broadband services in 2012 and H113 and the government's continued expansionary policy, which will sustain high private consumption levels.
* Bahrain's mobile market grew by an impressive 6.1% in the first six months of 2013, to 2.253mn subscribers. This was stronger than
expected growth, pushing the penetration rate up to almost 170%.
* Operators and the regulator reported an acceleration in the decline of ARPUs in 2012 and H113, resulting in a downwards revision of our ARPU forecasts. We expect ARPUs of BHD7.4 in 2013, falling to BHD6.7 by 2017.
* After recording growth in 2012 the fixed-line sector took a turn for the worse in the first half of 2013. Both subscriptions numbers and usage declined in 2013, resulting in a downward revision of our forecasts. We estimate there will be 256,000 fixed-lines in Bahrain at the end of 2013, dropping to 246,000 by 2017.
Full Report Details at
- www.fastmr.com/prod/751999_bahrain_telecommunications_report_q1_ ..
This quarter Bahrain's Risk/Reward score dropped by 1.3 points to 51.4, pulling it down just below the regional average of 52.1. The decline was due to a 2.8 point drop in its Industry Rewards score, to 44, due to a considerable fall in ARPU during the first six months of 2013. There were no changes to Bahrain's scores in any other categories, and it remained in seventh position in BMI's Telecoms Risk/Reward Ratings table. The country's lowest score is in the industry risks category, which reflects strong state influence on the telecoms sector despite the existence of an independent telecoms regulator, and continued government ownership of the incumbent operator. Bahrain's highest score is in the country risks category, as the country benefits from a positive real private consumption growth outlook on the back of the government's expansionary budget and high public sector spending.
Key Trends And Developments
Bahrain's Telecommunications Regulatory Authority (TRA) restarted the LTE spectrum allocation process in late September 2013 by offering LTE licences to the country's three mobile operators, Batelco, Zain and Viva. On September 24 it was announced that a spectrum auction had been completed and that Viva had been awarded six blocks of spectrum, Batelco four, and Zain two. The TRA did not disclose how much operators paid or which blocks of spectrum they received between the 900MHz, 1800MHz, 2100MHz and 2600MHz frequency bands on offer. Menatelecom was excluded from the auction, but the TRA provided it with the necessary code to re-farm its existing 3.5GHz spectrum for LTE services.
Batelco began offering data back-up solutions over its 4G LTE network for corporate clients in September 2013. The new service allows customers to implement global Multiprotocol Label Switching (MPLS) communications services more efficiently. Later, in October 2013, Batelco and Indian telecoms operator Tata Communications established a partnership to extend their international reach. According to the deal, an MPLS point of presence node will be set up at Batelco's data centre in Manama, allowing it to expand the reach of its international network via Tata Communications' global network.
Despite much investment in its LTE network and its corporate services portfolio, Batelco is losing its grip on its home market. At the time of writing the incumbent had yet to release its Q213 operational data, but BMI believes that by June 2013 it had fallen into third and last position in Bahrain's mobile market. Meanwhile, three of the company's top executives resigned between May and September 2013, which may indicated deeper challenges than just coping with the current market dynamics.
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