Bahrain's regulator offers groundbreaking incentives for the country's second GSM operator

Bahrain's government terms and provisions in the license make it very attractive for interested parties. The Arab Advisors Group has been analysing the Bahraini market for over two years and believes that this small and well-developed market can certainly sustain another operator. The availed license incentives add quite a bit to the attraction.

The new Bahraini Telecommunications Law entails the issuance of a license to a second GSM operator in the country to compete with existing operator, Batelco. The mobile Licensee will be authorized to establish and operate a GSM mobile telecommunications network and to provide public mobile telecommunications services in Bahrain. The winning bidder will also have the right, but without obligation, to establish and operate a 3G network.

A newly released report, "The tender for a second GSM license in Bahrain will kick off the telecom liberalization drive in the country" was released to the Arab Advisors Group's (www.arabadvisors.com) Strategic Research Service subscribers on Feb 5, 2003. The research is one of more than 17 Arab Advisors reports and research notes that are highly relevant to the potential in the Bahraini communications market. These include Bahrain Communications Projections report 2002, Bahrain Internet & Datacomm Landscape report 2002 and An overview of Batelco- the monopoly operator in Bahrain 2002.

"As we have detailed in our reports on Bahrain, the number of mobile users who are between the ages of 14 and 21 has risen rapidly in the last two years, mainly due to the successful launch of the prepaid SimSim service in addition to the availability of cheaper handsets in the market. With this increase in the young generation users, the demand for personalized services such as downloading ringing tones and more sophisticated wireless Internet services will definitely increase. The Arab Advisors Group projects Bahrain to have a GSM subscriber penetration of 77% by 2006". Ms. Hala Baqain, Arab Advisors Bahrain Analyst, commented.

"It is evident that the government of Bahrain is very keen on introducing competition to its communications market," Jawad Abbassi, president of Arab Advisors Group, said. "The new mobile operator in Bahrain will have incentives and privileges unseen before in other Arab market. These include very modest annual license fees of 1% of gross revenues (compared to at least 10% in other Arab countries), unbundling of Batelco's ducts and fiber infrastructure, national roaming with Batelco for a year, the option but not the obligation, to rollout 3G services and the right to lease circuits from Batelco for International Long Distance service provision. With an upfront license fee of 265,000 US$ only, the emphasis in this "beauty contest" tender is not on maximizing immediate governmental financial gains, but making the new network quite viable right from the start." Mr. Abbassi added.