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Bahrain Telecommunications Report Q4 2011

Bahrain Telecommunications Report Q4 2011


Business Monitor International's (BMI) Bahrain Telecommunications Report (Q4 2011) provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bahrain's telecommunications industry.

The Telecommunications Regulatory Authority (TRA) of Bahrain has published its full-year 2010 market data for the mobile, fixed-line and broadband sectors. In this quarter’s update to the Bahraini telecoms report, BMI incorporates the latest regulatory data for the mobile, fixed-lined and internet sectors as well as Q111 market data published by the country's two biggest mobile operators – Batelco and Zain Bahrain. It also contains an update to BMI’s five-year mobile ARPU forecast for the Bahraini market and analysis of key developments in the telecoms markets. It is worth noting that BMI penetration rates have been revised in this quarter’s update to reflect the use of new population data for Bahrain. 

The regulator revealed there were 1.567mn mobile subscribers in the country at the end of 2010, slightly more than BMI’s previous estimate of 1.519mn. This represented a penetration rate of 124.2%. BMI calculates that the mobile market recorded its third consecutive quarterly decline in Q111, falling by 2.3% q-o-q to 1.531mn subscribers. BMI attributes the decline in H210 and Q111 to a combination of disconnection of unregistered lines, fewer growth opportunities brought on by market saturation and displacement of residents and foreign workers at the peak of the country’s political crisis in the first few months of 2011. However, BMI expects growth to return during the second half of the year, driven by increased public spending and the gradual uptick in economic activities. Therefore, the authors forecast an average growth rate of 1.5% over the next five years, bringing mobile penetration to about 120% by 2015. Bahrain's mobile market remains predominantly prepaid. However, the disconnection of unregistered prepaid lines at the end of 2010 has improved the subscriber mix of mobile operators in the country. 

Although new prepaid offers and promotions introduced by some operators are expected to boost prepaid subscriptions again, BMI believes there is greater emphasis on attracting postpaid subscribers by operators for long-term revenue growth. The report authors expect the sale of high-end mobile phones and mobile data packages to be key elements of operators' postpaid subscriber and ARPU growth strategy. 

According to the TRA, the number of active fixed-line subscribers decreased by 4% y-o-y during 2010 to 228,000, representing a market penetration of 18.1% according to BMI estimates. Fixed-line incumbent Batelco reported a subscriber base of 185,000, giving it a market share of 81.1%. The decline in fixed-line subscriptions during 2010 indicates acceleration in fixed-to-mobile substitution, especially as wireless broadband networks become the dominant form of internet access. BMI expects the downtrend in fixed-line subscriptions to continue during its forecast period, bringing fixed-line penetration rate to 14.3% by 2015. 

In contrast to the decline of fixed-line subscriptions, the broadband sector recorded strong growth with the total customer base expanding by 27% y-o-y during 2010 to reach 200,000. This represented a penetration rate of 15.8%. BMI’s forecast shows an average annual growth rate of 12.1% during the next five years, resulting in increased broadband penetration across Bahrain to around 25% by 2015.
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