Proving the case

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Dr Laith Sadiq, CEO, Mena Telecom, is optimistic about Bahrain’s broadband sector and the potential of WiMAX.

Bahraini broadband operator Mena Telecom is proving the potential of WiMAX in an already competitive market.

While WiMAX has had its share of detractors and most analysts have mainly plugged the potential of the technology in developing markets, some operators are proving that WiMAX can hold its own in far more developed markets.

Bahrain-based Mena Telecom is one such case, with the company – which uses WiMAX-e technology – having already gained some 20,000 users to its broadband and fixed voice offering since it launched operations back in November 2008.

The company’s CEO, Dr Laith Sadiq is familiar with some of the arguments that are used against WiMAX – such as there being too much competition from rival mobile broadband technology HSDPA, and fibre and LTE in the coming years – and he is quick to dispel them.

As he points out, Mena Telecom, which offers broadband and fixed voice services throughout Bahrain, is already gaining traction in one of the region’s most competitive markets, competing with mobile broadband offerings from the likes of Batelco and Zain, with STC also expected to soon step into the fray.

“We are already in this market competing aggressively against HSDPA. Batelco is offering one of the highest speeds which is 14.4mbps, I don’t think many countries offer this,” Sadiq says. “We also already have Zain offering HSDPA, so we are already in a competitive market where the end user expectation is high.

“What we have shown in the last six months is WiMAX can already compete in a market which is relatively sophisticated, where the packages are at the high end in terms of speed and capability, and the penetration relative to the Gulf is on the high side, or at least somewhere in the middle,” he adds.

For Sadiq, one of the most important factors in establishing a broadband business in a country such as Bahrain is to focus on the customers’ needs.

“The key thing we focused on is the end user experience, everything from the buying experience to the speeds, prices, how easy it is to access the internet, how quickly you can access it,” he says.

He adds that a new customer can enter one of Mena Telecom’s shops, buy an internet package and have the service running at their home within about four hours. While some WiMAX services have been criticised for relying on cumbersome hardware that sometimes has to be installed on the roof of the user’s house, Sadiq stresses that a new breed of “plug and play” WiMAX-e devices give a far more user-friendly experience.

Furthermore, the company also conducted extensive research before launching to ensure that it had knowledge of any areas or buildings that might have problems receiving the WiMAX signal, eliminating the chances of a new user plugging in their CPE only to find it doesn’t work.

“We have a very detailed map of where the coverage is and that is one of the key things we implemented at the beginning,” Sadiq says. “We know exactly what kind of coverage a customer can get, what kind of speeds he can get and what packages are available for him.

“It is not a trial and error sort of thing, when he gets it he knows, and the percentage where we got that wrong is less than 2%. You need to understand right at the beginning and make it clear to the customer what it is they can get.”

The company has also invested heavily in retail outlets and marketing, ensuring that customers have easy access to the operator.

In terms of pricing, Mena Telecom has tailored its pricing packages to cater for a range of customer budgets, although the company aims to compete more on broadband speed than price. In the consumer space, Sadiq says Mena Telecom has a competitive package offering 8mbps broadband for 13BD ($34) a month, including the device costs.

All of this has been instrumental in helping Mena Telecom gain more than 20,000 customers, which Sadiq estimates could represent a broadband market share of anywhere between 15% and 20%, depending on the overall size of the country’s broadband sector, for which estimates vary.

Market potential

For most analysts, the Bahraini market continues to hold potential for data services. Indeed, for Xavier Anglada a partner at Dubai based Delta Partners, the market retains significant growth potential, particularly for mobile data services.

“Broadband in general, and specifically mobile broadband significantly increased during 2008 and almost tripled in terms of number of official subscribers, so there is clearly a latent demand for broadband,” he says. “Still today we are at 10% overall broadband penetration and we do believe that there is a significant growth potential in the next two or three years.”

He adds that with the major mobile players such as Batelco and Zain pushing ahead in Bahrain’s mobile broadband sector, and with STC likely to be pushing for broadband connectivity quite soon, this trend of high growth ratios in the mobile broadband space is likely to continue through 2009 and 2010.

Mobility challenge

In this light, mobility is likely to be one of Mena Telecom’s major drawing cards, although the company will have to wait until November 2010, when regulations in Bahrain will allow it to start offering mobile broadband in the country.

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