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Wed 21 Jan 2009 04:00 AM

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Action plan

The general director of Bahrain’s TRA, Alan Horne, talks about issues affecting the whole of middle east.

The general director of Bahrain's TRA, Alan Horne, tells CommsMEA about his plans for 2009, including giving consumers in the country a louder voice, and introducing a third mobile operator to the region.

Monopolies, duopolies and a steady supply of new connections have not helped to create an environment that favours consumers in the Middle East. But as penetration levels rise and competition increases through the introduction of new operators, engaging with customers will become more of a concern for operators.

The head of Bahrain's TRA, Alan Horne, says that it is an issue that affects the whole of the Middle East, and not just the telecoms sector in the country that his organisation regulates.

The right to change and complain is not uppermost in most consumers’ minds within the region. - Alan Horne, general director, TRA.

Horne has marked out customer engagement as one of the TRA's priorities for this year, and he says that 2009 will see a change in the focus of Bahrain's TRA.

At present, Horne says that the TRA is split "80/20", with "80% working with the operators and 20% on the consumer side".

"That needs to be rebalanced to spending more time with the consumers, and we're going to have a major campaign in 2009 that we're working on now, and that should start hopefully in February," he says.

Horne describes the involvement of the consumer in the Arab region as "pretty minimal" but he feels that fellow regulators are starting to pay more attention to customer care, and he hopes to lead the way in driving a focus on customer satisfaction.

"We're going to have a major campaign to create awareness amongst the consumers on their rights and the operator's obligations, and also about the very right to choose, change and complain, which is not very natural and is not uppermost in most consumers' minds within the region.

"We do approve operator's customer contracts, so we are looking at this and they are getting better. We have to keep feeding back views to make sure all the terms and conditions are fair and reasonable, and we also recently issued a consumer protection document, which lists all the things that an operator needs to pay attention to when protecting a consumer. There is still more room to improve," he says.

As well as educating customers, the TRA is keen to gain greater insight into their thoughts on the telecoms services they use. In 2007, a survey of 1,100 customers by research firm Nielsen found that consumer's grievances mainly centered on tariffs; as well as a high level of dissatisfaction among expats regarding international call tariffs, the survey also discovered that only 30% were aware of their monthly fixed-line tariff. When the process is repeated this year, the TRA will hope to see an improvement to the "fair" satisfaction rating among mobile users that was judged to be "lower than the regional benchmarks", due to concerns over tariffs.

Tariffs have not only been an issue for consumers, they have also been a major gripe of incumbent operator Batelco.

At present, Batelco needs to seek approval from the regulator when it launches new price plans, and CEO Peter Kaliaropoulos has argued that as rival network Zain has a similar market share it is unfair for Batelco to be singled out.

Horne says that there will be a "variation" of the policy that will create more of a "level playing field" between Zain and Batelco. "We're going to be stepping in now. We've declared [Zain] as having significant power in terminating rates, so we'll be tidying up aspects on the wholesale side as well. Our main focus is to control the wholesale and to set the wholesale tariffs and to let the market determine the retail tariffs," Horne says.

Third operator

2009 will see the introduction of a third mobile operator, and will add to what Horne describes as operators "already tough task", with some of the  highest penetration rates in the region, well in excess of 100%.

"We're hoping to see [the third mobile operator] not only awarded but also operating before the end of 2009, so a third mobile operator will stimulate and stir up the market and make it truly competitive rather than a duopoly.

"We delayed [the tender] twice; the second time a number of the bidders were just getting their finances together and their bank guarantees and it was running into Eid and then the Christmas break so we pushed it to the beginning of January." The TRA boss adds that he does not expect any further delays to the process.

Horne will not reveal how much he expects to raise from the sale of the license, but he stresses that technical compliance will be a prerequisite to qualification for the financial round of bidding.

"First and foremost they have to be technically compliant to be able to roll out the network and we've set some reasonably high levels of qualification, such as the number of mobile customers they currently have and the number of countries they are currently operating in, and the experience of being in a start-up situation."

The TRA's strategy of targeting an experienced, international operator has drawn criticism from the chairman of Mena Telecom, Bahrain's WiMAX operator.

 Abdulhakeem Al Khayyat was quoted in local press saying the approach jeopardised the interests of local operators. But it could be a wise move, as it will require an experienced player to squeeze further growth out of the saturated market.

Mena Telecom has expressed an interest in bidding but it will need to find an international partner to meet the TRA's bidding criteria, while three other unidentified operators have registered to bid.

Virtual operators

Experience is cited as the reason an established operator is being targeted rather than an MVNO.

Horne says: "Two or three of the MVNO companies in the area have been knocking on the door for some time, but we decided to go for the third infrastructure competitor and also to go for the unified licence in Bahrain.

"The companies have to have some economies of scope, and therefore they need to be into the fixed, international, mobile, WiMAX, ISPs and premium, value added services. That's how, as a small nation, we see that we can benefit. Through economies of scale and having our operators linked in with, or part of a subsidiary arm, or in fact being the lead in an organisation operating in many more countries and then giving economies of scope through having unified licenses and allowing them to do everything and anything within the country."

The CEO of one prominent MVNO operator in the region has questioned the clarity of the licensing process regarding establishing an MVNO in Bahrain. It is an area that Horne says will be addressed in 2009.

"We're rationalising our licensing regime and moving from the current 12 licenses we have to fundamentally one type of license called the unified licence. The unified licence will allow licensees to offer any technology and any service and the only restriction will be on the mobility aspect, until after the end of 2010."

"So this unified licence should allow MVNOs, if they can come to an agreement with one of the three operators."

Number portability

With a new operator set to enter the highly penetrated market this year, number portability (NP),  is expected to be available in Bahrain in the third quarter of the year.

Analysts have questioned the financial sense of introducing NP in a country with such a low population, and it is an argument that Horne is familiar with.

"Any incumbent in any country says there is no need for number portability and there is not an economic justification for it. The new entrants always say, ‘yes there is justification for NP'."

"As a small nation, if you look at the economic justification of NP it is hard to justify," Horne admits, but he describes it as consumer right and that the cost should be shared. As such, the TRA has decided to fund the establishment of a NP scheme.

"What we have said is that the money we are raising from auctions we want to put back into the industry. And this is one way of putting it back into the industry and benefiting the consumer. Exactly how it is to be managed, we've yet to determine."

Local loop unbundling in Bahrain

The unbundling of the local loop in Bahrain will see Batelco's domination of the fixed-line market come to an end. The planning process is already under way, and it could be another source of conflict between the regulator and the operator.

"The consultants we appointed have had two visits to Bahrain, so that's in the early stages and we have a document that will be going out in the early new year," says director general Alan Horne.

"The TRA will be determining the cost of that local loop and the price that Batelco will have to charge to other operators. And we'll be determining that through a cost modeling exercise which we'll be doing very carefully with Batelco."

Horne said that LLU is "a major source of potential conflict and difference of opinions" but he is hopeful that an agreement between the TRA and Batelco can be reached.

"Batelco has the right to take us to arbitration over anything we do, and we would have to justify that to arbitration, if they deem that they have a chance of winning or overturning our decision."

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