Fighting talk


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Peter Kaliaropoulos is on the attack, and Bahrain’s Telecoms Regulatory Authority is his target. The BatelcoCEO talks controversy, cooperation and competition.

 

I’m such a happy person,” grins BatelcoCEO Peter Kaliaropoulos, “because I don’t have to deal with them any more.”

 

‘Them’ is Bahrain’s Telecoms Regulatory Authority (TRA), and Kaliaropoulos is candid in his condemnation of the independent body, long an object of his ire.

 

“I had to take a step back because the TRA and I didn’t see eye to eye,” he explains more firmly. “I think they’re unfair and they’re biased and they’re totally narrow-minded.”

 

If this is Kaliaropoulos happy, then I’d hate to see him mad. But this is just the latest boiling over of a simmering feud betwen Kaliaropoulos and his opposite number at the TRA, General Director Alan Horne.

 

In a war of words, each has accused the other of abusing his position to the detriment of Bahrain’s telecoms customers. The regulator has criticised Batelcofor “circumventing the regulatory process and misleading the general public”, while the operator has slammed “harsh, unfair and unreasonable regulatory measures” it argues have stymied innovation in the country’s market.

 

On the day we meet, the TRA is running a new advertising campaign on the front of the local daily newspapers. ‘I love my number’ reads the tagline, referring to a number portability service that will allow consumers and businesses to register their interest in keeping their mobile or land line telephone number when changing service provider.

 

“The TRA will say it’s acting in the interests of the consumer, but I’ve seen their latest advertising campaign, and in my view, what a waste of public funds,” says Kaliaropoulos dismissively. “At least, I’m a commercial organisation; when a government organisation has a new branding campaign, I’m not sure what value that is.”

 

The campaign may not impress Kaliaropoulos, but number portability is just the latest in a series of reforms that have ensured Bahrain is widely viewed as one of the region’s most dynamic telecom markets. It boasts two mobile operators — with a third due to launch later this year — several WiMAX players, and a laissez-faire policy towards VoIP.

 

Since the TRA was established in 2002, there has been a significant push toward liberalisation, but the arrival of so many players into the market has proved discomforting for the incumbent. Batelco’s market share is under threat, but according to Kaliaropoulos, the regulator is confusing market leadership with market dominance, and punishing Batelcounjustly.

 

“This is a small market with too much regulation; they’re just cherry-picking the latest regulation from every other market, and dropping it into Bahrain hoping that everybody’s going to come in,” he says. “It’s not right. Regulatory reform is very important, but so is the pace of that reform.”

 

In a population of around 1.1 million, mobile penetration in Bahrain hit 131 percent at the end of 2008. The island state has a high degree of broadband penetration, and the combined revenues of the country’s telecoms operators soared to $796m last year, a rise of 6.3 percent from 2007.

 

Batelcois doing well within that growth story, too. The operator enjoyed a record 2008, with net profit for the 12 months up 2.7 percent at $276.4m. However, Kaliaropoulos argues that future growth and development is being endangered by the TRA’s noninterventionist stance with regards new competition.

 

“A lot of operators are putting a business plan together, but then if all those plans were put together you’d think you were looking at a market of 20 million people,” he says.

 

Kaliaropoulos estimates that Batelco’s capital expenditure in Bahrain has dropped by as much as 20 percent so far in 2009, compared to this time last year. Put simply, why should the firm spend its money on infrastructure that will be piggybacked by dozens of smaller operators?

 

“With the regulation as draconian on us as it is, it takes away the incentive to invest a lot more,” he explains.

 

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