Telecoms liberalisation enters final phase

02 July 2004
Licences for fixed-line and full international services were opened for applications on 1 July, in what is the final element in the process of liberalising the kingdom's telecoms market. 'We have become the first market in the Middle East to open all sectors of the market to competition,' the director of the Telecommunications Regulatory Authority, Andreas Avgousti, told MEED on 26 June.

There is no deadline for bidders for the new licences because there is no limit to the number of licences that the TRA can issue. The fixed-line licence contains no minimum coverage requirements, allowing operators to offer tailored packages bundled with other services - to, for example, financial institutions or real estate developments. 'Because of this flexibility, we do expect to see an interest that might not be forthcoming if blanket consumer coverage was required,' said Avgousti. 'And the international services licence should be attractive because the market is a very competitive one and there is plenty of room for prices to fall.'

The TRA has seen steady take-up of value-added service (VAS) licences, offered in mid-August 2003, and expects demand for internet service provider (ISP) licences to pick up once they can be held in conjunction with an international services licence. International facilities, paging, public access mobile radio and very small aperture terminal (VSAT) licences were offered in January (MEED 30:1:04).

The mobile sector was the first to be opened to competition, when the Kuwaiti/local MTC-Vodafonejoined Bahrain Telecommunications Company (Batelco)in the market in December. The TRA has the option to offer a third GSM licence. 'We will look at the behaviour of the existing operators and the impact of competition on prices and services before taking a decision,' Avgousti said.

The two operators have so far failed to agree on an interconnection order, frustrating the regulator (MEED 25:6:04). 'Previously, the two have had some justification for the lack of agreement, but now that we have approved Batelco's reference interconnection order (RIO), we expect the two to sit down like adults and negotiate,' said Avgousti. 'I will be very disappointed if the TRA has to issue another interim order.'

The TRA is launching a campaign to raise awareness of its existence, reflecting a shift in its role following completion of liberalisation. 'Now that we have almost finished the job of inviting in new players, the TRA's role is two-fold - to ensure operators play by the rules of the game, and consumer protection. Customers are insufficiently aware that we can deal with their complaints, although ideally the operators will respond satisfactorily,' said Avgousti. 'And they do seem to be responding better to their customers, which suggests that competition is achieving the desired results.'

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications