OBG talks to Sheikh Hamad bin Abdulla Al Khalifa, Chairman, Batelco Group; Ulaiyan Al Wetaid, CEO, VIVA Bahrain; Mohammed Zainalabedin, General Manager, Zain Bahrain

Text size +-
Share
Sheikh Hamad bin Abdulla Al Khalifa, Chairman, Batelco Group; Ulaiyan Al Wetaid, CEO, VIVA Bahrain; Mohammed Zainalabedin, General Manager, Zain Bahrain

Interview: Sheikh Hamad bin Abdulla Al Khalifa, Ulaiyan Al Wetaid, Mohammed Zainalabedin

To what extent will the Third National Telecommunications Plan (NTP) affect local competition and enable both consumers and operators to capitalise on higher broadband speeds?

SHEIKH HAMAD BIN ABDULLA AL KHALIFA: The key goal of the Telecommunications Regulatory Authority’s (TRA) Third NTP is to focus on ensuring the massive upgrade of internet services for the entire country of Bahrain. Batelco has been investing in the roll-out of its fibre network to greenfield areas of Bahrain and it is cautiously looking at upgrades to existing brownfield areas, depending on the government’s strategy for the National Broadband Network (NBN).

The kingdom’s wide availability of a fibre-optic network would put Bahrain in the forefront of the communications industry in delivering data transfer speeds up to and beyond 1 gigabyte per second (Gbps) to businesses and 100 megabytes per second (Mbps) to residential premises. We look forward to successful cooperation with the TRA and other telecommunications providers, which will ensure such services for the residents of Bahrain.

ULAIYAN AL WETAID: The Third NTP will play an important role in shaping the telecommunications industry in Bahrain by promoting healthy competition between the players. It will lead to the commercial deployment and roll-out of the 4G wireless communications standard, long term evolution (LTE), through a large scale spectrum award process and release early this year.

The plan will also have a direct impact on the uptake of broadband technology, as it will facilitate the roll-out of a high-speed broadband network at attractive prices. Both businesses and consumers will benefit from higher data transfer speeds, up to 1 Gbps and 100 Mbps, respectively, along with the availability of high-speed mobile broadband.

Faster broadband speeds will allow operators to offer advanced services such as internet protocol television, video on demand, home surveillance, etc. Operators can also introduce experience-based pricing and charge premium rates for faster download speeds. Consumers would not only benefit from faster speeds and better quality of service, they would also have access to more innovative products and services at affordable rates. The increase in competition would eventually benefit all consumers by the provision of better-quality service at more affordable prices.

MOHAMMED ZAINALABEDIN: The Third NTP has assessed the main enabler and operator requirements to provide higher broadband speeds. If it is implemented efficiently, the NTP will lead to great economical benefits for the kingdom. An essential outcome would result in operators having access to an advanced LTE spectrum, bonded with the planned, fixed NBN, which would provide wholesale services to the operators in support of their network backbone. Overall capacity supply would also be increased for international connectivity links. Therefore, the Third NTP has the potential to remove any imbalances among operators, ensuring that operators compete at the same level when it comes to providing these services. Finally, competition will be further enhanced, creating a better environment for the consumer.

How do you envisage the broadband market evolving following the TRA’s awarding of the 4G LTE spectrum in Bahrain?

AL WETAID: The LTE Spectrum award will open new horizons as it allows much faster data speeds of more than 100 Mbps over mobile networks. This will further accelerate growth in the mobile broadband market both in terms of subscribers and data usage. With the launch of LTE, mobile broadband will offer speeds and quality comparable to either ADSL or fibre-to-the-home offerings.

ZAINALABEDIN: Most operators have had successful LTE trials. Just like 2G, 2.5G and 3G, 4G LTE represents the normal evolution of wireless broadband technology. It is expected that LTE will boost the broadband market and internet usage, which in turn requires wider backhaul capacities and spectrum bandwidths to deliver the expected higher speeds.

Penetration growth will be dependent on service affordability, and the 4G LTE service will not be affordable unless the spectrum is awarded at high prices. Of course, the spectrum licences for the 4G LTE technology should be offered on a fair and reasonable basis, as the continued contribution resulting from the high penetration of 4G LTE services to the economy of the kingdom will outweigh any one-off, upfront licence fee by far.

AL KHALIFA: This promises to be an exciting milestone in the evolution of the kingdom’s broadband industry and we anticipate that it will open up rapid demand for products and services that will benefit from the speeds that 4G can deliver. We are well prepared for 4G LTE and the industry is now awaiting the outcome of the TRA’s roll-out plan for 4G LTE broadband spectrum. LTE Advanced, the next generation standard beyond 4G LTE, is another area that is sparking interest as we move forward.

How strong is the argument that the TRA should address price erosion with regard to the declining average revenue per user (ARPU)? Or should a free market prevail?

ZAINALABEDIN: Declining ARPUs is the main concern that the operators are facing. Requirements for further investments in infrastructure, licensing, network and other elements are facing lower and lower revenues retained from customers due to intense competition.

The regulatory authority should stop value destruction scenarios until effective ex post regulatory frameworks are maintained.

AL KHALIFA: While innovation and quality of service can lead to competitive differentiation between operators, many customers will always be drawn to the lowest price, even if it may mean sacrificing quality. Without a doubt customers continue to be the winners in Bahrain’s market as they benefit from competitive bundled offers for the most up-to-date devices. However, in order to be fair to all operators, the TRA needs to ensure a level playing field that provides all mobile operators with the same advantages and disadvantages.

AL WETAID: In a highly saturated and competitive market like Bahrain with mobile penetration well above 150%, it is very important for regulators to take measures to address price erosion. If such a market is left completely unregulated, there would be price competition between the operators as they increase or maintain market share, leading to a significant decline in ARPUs.

Coupled with stagnant or shrinking subscriber bases, the strong decline in ARPUs has the potential to pose a serious challenge to the profitability and sustainability of the industry.

The TRA is already taking some steps to prevent operators from selling below cost and subsidising losses in one market through profits in another. Such steps are very beneficial for the industry and the TRA should continue monitoring and regulating the telecommunications market in Bahrain.

How will the addition of two new fibre-optic cable landing points enhance the ICT environment in the kingdom?

AL WETAID: The new landing points would lead to markedly enhanced capacity for traffic flow in and out of Bahrain, which allows operators to offer faster broadband speeds and more data-intensive applications. These developments would also foster further advancement of the ICT sector in Bahrain, as the extra capacity and redundancy available would lead companies to offer data centres, cloud computing and hosted services to organisations both inside and outside of Bahrain.

ZAINALABEDIN: Every year, there is a rise in the amount of traffic, driven by the increase in smartphone penetration, that is exchanged over the internet. Therefore, the two new international fibre-optic cable landing points will open up opportunities to obtain higher capacities and speeds for lower cost. Nevertheless, this increase in supply goes hand-in-hand with the need for effective competition among international capacity suppliers.

It is important the cable landing points are made openly accessible to all operators to avoid any service supply monopoly. This would definitely be an enabler for creating a state of art ICT environment within the kingdom, facilitating the growth of a strong telecoms market.

AL KHALIFA: The addition of new international gateways will enhance redundancy and the quality of internet service and ensure that Bahrain has sufficient connectivity to address the rapid growth that continues in data traffic.

The addition of the new landing points will ensure that operators and other communications companies benefit from greater choice, value, diversity and resilience going foward. Improving the ICT environment will be crucial, as it plays a significant role in boosting the productivity and competitiveness of Bahrain, in its regional and global dealings.

What are the effects of increasing mobile broadband demand on Bahrain’s telecommunications infrastructure development?

AL KHALIFA: The huge demand for mobile broadband services is pushing all operators to continuously review and upgrade their offerings. This could be a real boon for customers in Bahrain who can benefit from competitive prices for high-end products and services that surpass the ranges of many leading international operators.

We have worked in collaboration with the world’s leading corporations and invested heavily to facilitate the delivery of 4G LTE mobile technology in order to provide super-fast data speeds for services such as mobile HD video-streaming and conferencing, web-based applications and services, and the rapid transfer of large files. There is no doubt that 4G LTE will stimulate the path to a networked society in Bahrain that is in line with the 2030 vision.

AL WETAID: Bahrain has witnessed strong growth in the broadband market since 2011, especially in the mobile broadband segment. With rapidly increasing data speeds, consumers are becoming more data-hungry, which is leading to a strong rise in average usage per subscriber. This jump in broadband demand has been fuelling infrastructure deployment in the telecommunications market of Bahrain.

The growth in broadband demand has also led to the decision to deploy the NBN. This high-speed fibre-based internet access network would not only reduce operators’ costs of providing broadband services, but in addition it would result in increased capacity that would thus allow operators to offer faster broadband speeds and a better quality of service with reduced costs. At the same time, we are gearing up to introduce the latest in mobile broadband technology with LTE (4G).

ZAINALABEDIN: There has been triple-digit growth in mobile penetration over the past few years. We are constantly upgrading our network to enable the most affordable broadband services.

To a large degree, demand is being driven by smartphones and tablets, as they are handy, affordable and data-consuming. Consumers are mainly interested in access, and mobility provides a clear edge here. Undoubtedly, Bahrain broadband data rates are the cheapest in the region.

Broadband services have given a new direction to telecommunications in Bahrain. They have reshaped technology inputs and tariffs, thus spurring triple-digit mobile penetration levels. This has created a race for operators to upgrade their infrastructure and to provide the best quality of service in order to cope with the increased domestic consumer demand.

Share

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Bahrain 2013

Telecoms & IT chapter from The Report: Bahrain 2013

Cover of The Report: Bahrain 2013

The Report

This article is from the Telecoms & IT chapter of The Report: Bahrain 2013. Explore other chapters from this report.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart