Government reports strong interest in GSM licence

24 January 2003
International and local operators have expressed strong interest in obtaining a second GSM mobile operating licence to run alongside the kingdom's existing operator, Bahrain Telecommunications Company (Batelco). Prospective operators have until 5 March to submit their final bids for the licence, which heralds the opening up of the local GSM network to competition (Telecoms, MEED Special Report, 10:1:03, pages 33-34).

In a presentation to the MEED Middle East Telecoms Conference on 21 January, Mohammed Alghatam, chairman of the newly-formed Telecommunications Regulatory Authority (TRA), said a shortlist of preferred bidders would be issued in late March and an award of the licence would follow in April.

Under the terms of the 15-year concession, the new operator will acquire the rights to offer GSM services throughout Bahrain and will be allowed to interconnect with the existing fixed and mobile infrastructure of Batelco. The winner of the licence will also have the option to develop 3G services, providing Batelco does not introduce its own network within nine months. Mobile penetration in the kingdom stands at about 50 per cent of the 650,000 population.

The award of the second GSM licence is the first stage in the process of liberalising the local market for telecommunications services in line with WTO regulations due to come into force by 2005.

The government is also considering divesting its controlling stake in Batelco - which is 20 per cent owned by the UK's Cable & Wireless- through an initial public offering (IPO). Another option under review is to take an equivalent equity stake in the new operator, which must be registered as a local domiciled entity. Following the launch of a second mobile licence, the TRA plans to issue a further nine operating licences, covering: value-added services; internet service provision; public access to radio and paging services, international facilities and services; and fixed-line usage.

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