Batelco Bahrain Incumbent Telecom in Bahrain

Bahrain has been at the cutting edge of Middle Eastern telecommunications industry since the government liberalized the sector in 2002. What is the central role that Batelco plains in Bahrain’s economy and what are the market opportunities and challenges?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: Batelco has indeed played a significant role and for the last 30 years has been the leading telecommunications company here in Bahrain. In whatever has happened since the liberalization I think Batelco has been the prime locomotive for that change. We have invested a significant amount of money in building one of the most modern networks in the world both on the fixed network side and the mobile side. And its been a clear goal from Batelco to support the Kingdom in whatever way we can in building a superb modern infrastructure.

What is your perception of the regulatory environment in Bahrain and what areas could be further improved to facilitate your operations?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: I think there is no simple answer. The first point is that Batelco believes in competition and for the Kingdom it is going to give our customers new, good, and competitive services. We believe Batelco should have the same opportunity to compete in the market as new players do. Because we have a good platform and a lot of our customers are already connected and we have a nice, big world class network and we understand the need for regulation and that we will have to play a different role than some of the newcomers in order to satisfy the competition in the market, as well. We also have to mention that Bahrain is a micro-market and we cannot enforce regulation like in Europe and other parts of the world and make that happen in Bahrain. We need to adapt the regulations to the country and the market size. We have mobile penetration well about 120% already and I don’t think this country will need a third mobile operator. If you look at the number of licenses that have been awarded I see that there is no way that all of those licenses and companies behind the licensees can have healthy business over the next couple of years. Its key for me that regulation needs to enforce competition to makes sure that there will be pressure one everybody in the market to come up with innovative products and competitive prices to benefit the Kingdom. Competition can be overdone and there is no way that a market our size can justify to have 140 companies competing on fixed, broadband, or mobile networks. If this happens no one will end up having a healthy bottom line and we should really never copy what is happening in the European markets. We can never make things happen in a short time that took place in 20 years in other markets and we have to adapt the regulations to the micro market we are a part of.

The Saudi Telecom (STC) has won Bahrain’s third mobile network operating license. According to TRA this move is a result of the introduction of a second operator not being effective in lowering prices. What is your position on the introduction of a third operator and what are your fears and expectations?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: We have a highly penetrated mobile market and for me that is a good signal that competition works. When you have mobile penetration above 120% then it is only because there are some very good, attractive offers in the market. If you look at what is happening over the last couple of years, the product innovations from our side have introduced 3G, mobile broadband, and significant speeds compared to any market in the world. We are covering a majority of the Kingdom without services already so everybody can have mobile broadband. Competition and regulation work here, even without a third mobile operator. A third operator may bring new services but it is going to be difficult for a third operator to have really healthy business in a market for highly penetration already.

The third operator expects 20% market share in three years, do you think this is feasible?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: Everything is feasible but you can always buy your own market share but that is not healthy for anybody. It’s not about getting 20% market share it is about getting 20% market share with a healthy bottom line. Everybody will struggle going into a market as number three in a market the size of ours.

What will this mean for Batelco?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: Of course the mobile market will change. We have a strong belief that regulation will be less in the future in the mobile market. Basically Batelco is very heavily regulated and our competitor entering the mobile market is not regulated at all. Mobile deregulation does need to take place and we believe that now with a third competitor entering the market the regulator will look at that and say “okay, now we need to make some changes on the mobile side.”

Batelco expects double digit revenue growth in the next 9 months and posted a net profit of 26 million BD for the first quarter of this year. How has Batelco achieved its successful financial growth and can you chart the growth of the group?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: I think Batelco is part of the Batelco group and over the last couple of years we have completed some very successful acquisitions and we have been scaling our business by those international acquisitions and that is going to help the group. Synergies will be exploited and volumes of scale will be significantly increased with those acquisitions. Batelco Bahrein is still a significant contributor to the success of the Batelco group and this is our home market and always has been and always will be our home market and of course we have a good business because we run a very efficient network and company and in that sense we have been good about preparing for competition and we have managed to take our company one step further than our competitors in terms of customer understanding.

Can you give us a brief overview of Batelco’s latest technologies and services that you will launch in 2009-2010?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: We have launched for example mobile broadband and its superb compared to anything else in the market and is the leading standard for mobile broadband services in the region and maybe even the world. The feedback from our customers is unified saying it works perfectly. Of course we will extent the amount of content linked to that service and that is one of our focus areas.

Does this technology compete with WiMAX?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: Looking at the broadband market we have ADSL, fixed line broadband, mobile broadband, and WiMAX offers. All of them are in competition but because of the choice for the customers they can pick what they need and a lot of people take both broadband and mobile.

When we talked with WiMAX, they said they were already the leading technology and were able to capture significant market share. 

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: There’s nothing cutting edge about WiMAX. WiMAX has been around for many, many years so whoever says that is cutting edge is incorrect. There are a lot of issues with WiMAX; WiMAX is a supplement to mobile broadband and is part of the broadband environment.

What is Batelco’s main strategy for the next three years?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: It is two fold. I think we are going to grow in our local market here in Bahrain and we are going to grow the market in the region around us. That is our two main strategies to continue to grow and to protect the business we have and maintain our market share as well as our leading position in both the fixed network market and the mobile side. We would also like to grow significantly abroad as well.

The ICT development is integral for Bahrain’s continued growth. What is the social role Batelco is playing in the development of Bahrain?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: We one of the leading companies of this Kingdom and we definitely play a role as well in terms of social responsibility. If you look to our annual reports and the press clippings from each week you will see that we take that responsibility very seriously and we support the Kingdom across different segments and areas wherever we can with sponsorship, money, and activities.

What is your main challenge as an incumbent operator on the Bahraini market?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: I think we have to position everybody would like to have. We have a challenge to maintain that position and a challenge to keep on developing our biggest asset, being out employees. We also have a challenge to make sure we can keep on building the most innovative technology through our employees which we can do through education and training. Another challenge is to provide good customer service and keep our customers happy and that is a main goal of ours to make sure we will invest in system support.

What is your policy toward the environment and sustainable development, what is your strategy?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: We are following closely whatever happens around the world and one of our main aims is to ensure that we are a green company. Wherever it makes sense we have thoroughly implemented policies for being green and taking care of the environment. It is high on the agenda at Batelco.

To summarize, what is your long term vision and dream for Batelco Bahrain?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: The vision is definitely to grow to a size double of what we are today by growing nationally in Bahrain and internationally as well. If I look into the future I see Batelco being a significantly larger group and highly successful in launching mobile/broadband services toward customers.

You mentioned that you want to double in size locally and internationally and you have plans to develop yourself into India and African markets, can you explain a little more?

Batelco Bahrain Incumbent Telecom in Bahrain, CEO of Batelco Bahrain, Gert Rieder: We are focusing where the growth is and today the growth is coming out of markets like India and Africa so that is why we have acquired six license with an Indian partner to provide mobile services to six regions in India. It is a huge growth market and I think we are focusing on getting the growth where the growth is reachable. Also, we have to focus on Africa and again we are focusing where the growth is and its high on our agenda.