As Bahrain’s data network providers have sought to meet the needs of the latest mobile smartphones, observers of the kingdom’s telecommunications market have noted the need to expand the radio spectrum. As far back as 2011, Reuters was reporting that the telecommunications operators within Bahrain were clamouring for access to additional portions of the radio spectrum, and the 2.6 GHz frequency band necessary for the provision of fourth-generation long-term evolution (4G LTE) technology in particular. In 2012 the Telecommunications Regulatory Authority (TRA) announced it would release radio spectrum necessary for true 4G into the market in 2013 via a competitive auction process. The development of 4G services within the kingdom is also a key aspect of the Business-Friendly Bahrain strategy developed by the Economic Development Board, as well as a key goal in the Third National Telecommunications plan released in 2012 and the broader Bahrain Economic Vision 2030.
The transition within the market from 3G to 4G is necessary to meet the data speed requirement for the latest telecommunications devices. For example, Voice over Internet Protocol technology is popular among internet users in the kingdom, because it allows them to make phone calls using their data plans. However, this technology requires three to four times the average bandwidth of other mobile applications. Because data speeds of 100 Mbps are possible with 4G, it will also allow download data transfers at rates up to 10 times faster than that of 3G networks. New 4G technology is capable of offering these speeds to users because it makes a far more efficient usage of allotted radio spectrum.
GENERATION GAP: At the beginning of 2013, 4G technology was available in all of the Arab states neighbouring Bahrain. The TRA is eager to see Bahrain catch up, and has unveiled a plan that will help ensure the rapid spread of 4G LTE once spectrum is licensed. Indeed, by the start of the first quarter of 2013, Bahrain’s mobile telecommunications operators were using post-3G technologies, some of which were being marketed as 4G LTE. As in the US, telecommunications providers in Bahrain have been keen to label any technology that is post-3G as 4G. However, the International Telecommunications Union (ITU) has traditionally showed some hesitancy in identifying some of the basic forms of high-speed and advanced forms of 3G technologies as 4G. That said, today the ITU does recognise the marketing of Worldwide Interoperability for Microwave Access (WiMAX), High-Speed Packet Access (HSPA+) and similar technologies as 4G.
However, the ITU had stipulated that to be “true”, 4G must use International Mobile Telecommunications-Advanced technology and broadcast on a spectrum previously unavailable within Bahrain. This is in part due to the fact that radio communications of the Ministry of the Interior and Ministry of Defence currently use the required spectrum for radio communications for the defence, security and emergency services. In this regard, Bahrain is not unique. Other advanced economies face similar issues due to the requirements of various security technologies. For instance, in the UK nearly half of all bandwidth below 15 GHz is held by the British Ministry of Defence, which has said it plans to auction off some of its 4G spectrum to private sector communications in 2014.
LAYING THE GROUNDWORK: Until the end of 2011, Bahrain’s mobile telecommunications market was completely dominated by 3G technology, which struggled to cope with increasing demands for faster data speeds. Subsequently, a number of companies in Bahrain, including its three mobile telephony companies (Batelco, Zain Bahrain and Viva Bahrain), have all sought to develop the technical capacity necessary for 4G. Batelco began preparing to introduce 4G as early as 2010 when the company entered into a partnership with Sony Ericsson to develop its 4G technical capacity. In late December 2011, Batelco declared that it had successfully tested a 4G LTE network at its operations centre in Hamala. Next, Viva hosted a high-profile public demonstration of 4G technology on January 1, 2012, at Bahrain’s City Centre Mall. Zain also announced expansion plans in 2012 aimed at preparing for 4G LTE technology.
According to TradeArabia, a business publication, Zain committed itself to a $100m expansion programme in 2012. Not to be outdone, Batelco used the occasion of the March 2013 Mobile World Congress to announce that it was the first telecommunications company in Bahrain to operate true 4G LTE on the 1.8 Ghz spectrum. The company also announced its plans to acquire spectrum on the 2.6 GHz frequency for LTE in the auction expected to be opened by the TRA.
AUCTION BLOCK: In July 2012 the TRA announced that it was planning to award licences for the radio spectrum necessary for 4G speeds within Bahrain. To craft a competitive auction, the regulatory agency partnered with Frontier Economics, a European microeconomics consultancy, to design the bidding process. The first tranche of radio spectrum due to be released by the TRA included two paired sub-bands of 40 MHz as well as another tranche of 30 MHz of paired 2.6 GHz. Following the conclusion of the auction, the final step of the necessary licensing application was planned to take place by the end of the first quarter of 2014.
Although providers welcomed the auction, which they had been anticipating, less welcome was the announcement that the TRA was considering allowing a fourth mobile telecoms company to enter the market via this licensing round. In response to complaints from the three established operators, the TRA decided to limit the auction to existing providers, thus excluding any potential new entrants. This was bad news for WiMAX operator Menatelecom, which had also sought to join the auction for 4G radio spectrum. Expecting the acquisition of a licence to broadcast on the 4G LTE spectrum, Menatelecom had signed an agreement with Huawei Technologies, a Chinese firm, to develop a network with speeds of 100 Mbps in January 2013, prior to the TRA’s decision to limit the auction.
According to Telegeography, an international telecommunication publication, the TRA removed all mobility restriction for Menatelecom’s original fixed-wireless 3.5GHz operating licence in February 2012. That same year Menatelecom unveiled a 4G service with speeds of 80 Mbps. When the TRA subsequently declared that Menatelecom would be excluded from the March 31, 2013 auction of 4G radio spectrum, which would instead be limited to Batelco, Viva and Zain, the company sought a legal injunction against the TRA to participate, a move that led the regulatory agency to delay the auction indefinitely. Once this stumbling block has been overcome, the TRA says it will continue looking forward, with plans to conduct another study of the sector’s mobile spectrum requirements to 2020. That report is set to be available by the end of 2015.
4G & ADSL: With the introduction of 4G LTE technology into Bahrain, mobile broadband will be able to reach speeds and quality of service comparable to the preexisting asymmetric digital subscriber line (ADSL) services. As most of the advertising billboards located around Manama indicate, the new 4G LTE service is primarily aimed at individual personal users. For businesses, however, speed and mobile access are not the only issues to consider when choosing between competing 4G LTE and ADSL services. It is yet to be seen if businesses will lean toward ADSL and other solutions for their internet needs, given the bandwidth limitations that typically characterise LTE systems. For businesses that don’t usually require large amounts of bandwidth, 4G service is likely to remain more popular; this will be crucial for some businesses within Bahrain, particularly the banking sector, which is beginning to use a variety of web-based business solutions.
TOWARDS ADVANCED LTE: A shortage of devices in the kingdom compatible with 4G technology is likely to delay the growth of 4G subscriptions in the short term. The provision of 4G LTE will require new SIM cards, 4G-ready handsets and other devices for users, as well as other upgrades to the physical telecommunications infrastructure in Bahrain. Currently, telecommunications providers rely on roughly 1500 towers to provide coverage, and more towers will likely be needed for 4G LTE to be available nationwide.
BUSINESS OPPORTUNITIES: The market is already showing signs that companies are taking advantage of the opportunities offered by 4G. In 2013 Zain unveiled television network OSN’s pay-TV channels. Indeed the creation of the 4G LTE network will enable not only streaming of high-definition video for entertainment uses, but also enable other technologies such as the use of high-definition home surveillance. Batelco, for example, has launched an infrastructure-management-as-a-service product, which takes advantage of cloud computing technology. With the unveiling of the radio spectrums necessary for nationwide 4G LTE service expected once the legal complaints about the auction are settled, and the landing of two new important submarine telecommunications cable links to South Asia, Europe and the rest of the GCC being brought into the local market in 2013 (see IT chapter), the kingdom’s telecommunications operators will soon be able to provide customers with the latest in high-speed services.
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