Mobile broadband prices in Bahrain declined by up to 63% between 2011 and 2012, and Bahrain has amongst the lowest prices for mobile broadband in GCC and Arab countries. Bahrain also compared well with the OECD, according to the findings of the latest benchmarking in telecom services released by the TRA.
TRA expects faster and new services from the auction of additional spectrum planned in April 2013.
Mobile broadband prices are set freely by each of the three mobile operators since 2010. They have also come down significantly as a result of an increasingly competitive market.
The Telecommunications Regulatory Authority of Bahrain (TRA) has released the latest update of the retail price benchmarking study of telecommunications services in Arab countries. The study was commissioned by the TRA on behalf of AREGNET (the Arab Regulators Group). It was undertaken by Teligen, an independent consulting firm specializing in tariff comparisons.
The study compares the costs of baskets of telecommunications services for different consumer profiles (e.g. low, medium, high usage). It is comprehensive in terms of services and geographic coverage, and includes fixed voice services, mobile services, leased lines, and fixed and mobile broadband. It covers all Arab countries, and also includes comparisons with the Organisation of Economic Co-operation and Development (OECD) countries. Residential and business tariffs are analysed.
This study is important in understanding how Bahrain is performing in terms of developing a competition-led market for the provision of innovative communications services, available to all. In a number of key markets, TRA’s decisions to award new licences and allow new entry have had a dramatic effect on the retail prices paid by consumers for telecommunications prices in Bahrain. As highlighted below, this is particularly evident in the case of mobile telephony and broadband services, with the study showing that consumers have enjoyed substantial price reductions since the initial benchmarking was undertaken in 2008. The development by TRA of the regulatory framework and its adaptation over time to changing market conditions has also played a role in these outcomes. In June 2012 mobile penetration stood at close to 160%, compared to 130% in 2008, the year of the first benchmarking report. In addition to these 1.9m mobile subscribers, there were 413 thousand broadband subscribers in June 2012, representing a penetration rate of 34% compared to 10% in 2008. Between 2007 and 2011 the percentage of internet users grew from 53% to 77%.
Mobile prices in Bahrain have fallen by up to 30% between 2011 and 2012, and by up to 41% since 2008 when TRA decided to allow a third mobile operator to enter Bahrain. Mobile prices in Bahrain have been deregulated since 2010. They compare well with GCC and Arab averages but mobile prices in Bahrain remain consistently above the OECD average.
The entry of Wimax-based operators following TRA’s award of new fixed-wireless licences in 2007 has significantly enhanced the competitiveness of fixed broadband services in Bahrain. Fixed broadband prices in Bahrain have fallen by up to 53% between 2011 and 2012, and by up to 71% since 2008. For the low speed and mid speed baskets, Bahrain is now one of the cheapest GCC and Arab countries. The picture is somewhat different for the high speed basket (>15 Mb/s), where despite price reductions in 2012, fixed broadband in Bahrain remains relatively expensive compared to other GCC countries (particularly residential prices). The OECD average is significantly lower than the fixed broadband prices in Bahrain, the GCC averages and Arab averages, particularly for the high speed basket.
Bahrain is one of the cheapest Arab countries in voice services. Although Bahrain compares well with other Arab and OECD countries (low baskets) in terms of the cost of a basket of fixed voice services, calling revenues still represents a significant portion of the fixed line cost, suggesting that retail rates are not rebalanced. Fixed voice tariffs in Bahrain have been static in nominal terms for all users in the last five updates.
As is the case in most of the GCC countries, the prices for leased lines in Bahrain have not changed in nominal terms since the first Arab Price Benchmarking Study in 2008. Leased line prices in Bahrain are similar to prices in the Arab region, although by OECD standards, leased lines tariffs in Bahrain remain high The finding that prices have not changed over the last four years indicates that competitive pressures in the leased line market have been less intense than in other telecommunications markets within Bahrain. TRA has sought to address this during 2012 through the introduction of better retail prices for a new type of leased lines and through the introduction a new regulated wholesale local access service, which should enable other operators to compete more effectively in the supply of retail leased line services to end users. .
Over 2011-2012, prices in the Arab countries have generally come down, but since prices have declined in other parts of the world as well, the gap between prices in Arab countries and prices in OECD countries remains.
“It is obvious from the benchmarking study that competition in the telecommunications sector in Bahrain is continuing to deliver benefits to consumers through a variety of telecommunication services and increasingly competitive prices which is resulting in increased uptake and penetration rates of the services. This is perhaps most clearly evident in the price reductions and dramatic growth seen in mobile broadband services in Bahrain over 2011-2012. It is encouraging to see that measures taken by TRA to open up and liberalise the supply of telecommunications services are achieving competitive outcomes for consumers in Bahrain, with the study showing significant price reductions over the last four years in those markets where new entry has occurred. It is also encouraging to see Bahrain performing well when compared with other GCC countries, Arab countries and with the OECD in some benchmarks,” the TRA Chairman Dr Mohammed Al Amer, said.