Liberalisation driving growth for Bahrain’s broadband

Details: James Barton; Category: Trends & Forecasts; 16 April 2012; 8979 views

Bahrain's Telecommunications Regulatory Authority (TRA) has published market data relating to the end of 2011 for fixed-line, mobile and internet sectors. A stronger than expected growth in the broadband sector suggests that the regulator's efforts at liberalising the internet market are driving growth in that sector...

According to the regulator's data, the fixed-line market recovered in 2011 with net additions of 15,054 subscribers to reach 242,407 connections. This reversed a net loss of 10,268 subscribers in 2010. As a result, fixed-line penetration increased marginally by 0.3pps to reach 18.3% at the end of 2011. The performance of the fixed-line sector in 2011 is remarkable considering the heightened political and economic risk during anti-government protests that lasted for most of the year.

According to regulatory data, there were 1.694mn mobile subscribers in Bahrain at the end of 2011, up by 8% year-on-year from 1.567mn at the end of 2010. The main drawback for the mobile sector remains the high incidence of prepaid subscriptions, which accounted for 81.5% of total mobile subscriptions at the end of December 2011.

Growth in mobile subscriptions in 2011 was driven by a surge in subscriber uptake during H211, which reversed net losses in H111. Over the next five years, growth will likely be limited by the continued discounting of inactive lines and a shift in focus to high-value postpaid subscriptions. Therefore, mobile growth is expected to slow towards 2016, with 1.75mn subscribers expected by the end of 2016, and penetration sliding to 123.1%.

The broadband sector recorded significant growth in 2011 with net additions of 86,164 to reach 290,371 connections. In early 2011, the TRA directed fixed-line incumbent Batelco to implement local loop unbundling (LUU) and non-discriminatory prices for network interconnection to allow alternative operators to lower the tariffs they charge their customers. This policy is partly responsible for the strong take-up of broadband services in 2011, but mobile broadband is expected remain the dominant form of internet access in the long term.

This view is supported by the continued investment in high-speed mobile data networks such as LTE and WiMAX by the country's major service providers and the increasing availability of data-enabled wireless devices. Over the next five years, the internet sector will likely outperform the fixed-line and mobile sectors because of the expected strong demand for data services from both corporate and residential users. Broadband subscriptions are expected to reach 513,000 by 2016, equivalent to a penetration rate of about 36.1%.