The Bahrain Telecommunications Company (Batelco) has announced a net profit BD20.6m ($54.6m), for the second quarter of this year, down 11.2 per cent since the same period last year due to increasing domestic competition from Kuwait’s Zain and Saudi Telecoms Company’s Viva Bahrain.

“Revenues per customer are declining, while costs to acquire and retain customers are growing … with three mobile operators, this is a natural competitive consequence,” says Peter Kaliaropoulos, chief executive officer of Batelco.

Net profit for the first half of 2011 came in at BD38.8m for the first half of 2011, a decline of 4.5 per cent since the same period last year.

“Batelco’s consolidated gross revenues of BD163.2m declined by 4 per cent compared to the same period last year. However, our second quarter versus first quarter results delivered 2 per cent growth in gross revenues,” says Kaliaropoulos.

The company has operations in seven countries outside of Bahrain, which account for 37 per cent of total revenues.  The group’s mobile customer base grew by 12 per cent since the fourth quarter in 2010 and its broadband subscriber base grew by 8 per cent in the same period.  It has a total subscriber base of 10.3 million.

On 19 July, Batelco and Saudi Arabia’s Kingdom Holding Company entered a non-binding term sheet with Zain Saudi Arabia for the acquisition of Zain’s 25 per cent of shares in the operator.