By Sean Williams
Bahrain may have been slow to cash in on the Middle East’s oil boom, but it is determined to become a major media hub
Civilization often moves in cycles, and Bahrain’s own history has gone full-circle. Once regarded as an island paradise by the ancient Sumerians, it now promotes itself as a luxurious retreat for sun-seekers, epitomised with the advent of the Bahrain Formula One Grand Prix, shining an unprecedented global spotlight on the country. Central to Bahrain’s future plans is its ‘Economic Vision 2030’, an exhaustive document demanding a focus on competitiveness, fairness and innovation.
Like its neighbours, Bahrain’s digital media industry is heavily reliant on a single incumbent. However, thanks to a fair trade agreement with the US signed in 2006 (Bahrain is a close ally of the States, housing one of its military divisions), the government must relinquish its shares in Batelco by 2011, which now stand at 37 per cent of the company. When quangos, financial institutions and private Bahraini investors are added to the mix, that figure climbs to around 80 per cent, with the remainder belonging to UK-based Cable & Wireless.
“In August 2008, Mumtalakat, the Bahrain government holding company, began inviting bids for its direct stake in Batelco. Saudi Telecom (STC) and Etisalat are thought to be among the interested parties,” says Informa Telecoms & Media. “The government may hold off on the sale of its stake due to a decline share value caused by the global economic downturn.”
Batelco enjoys investments and subsidiaries in Saudi Arabia, Kuwait, Jordan, Egypt and other countries. But Mena Telecom, Zain Bahrain, Lightspeed and Nuetel are making a break for the market, as Bahrain’s Telecommunications Regulatory Authority (TRA) opens up the country to enviable competition. November saw the TRA issue a draft order to Batelco, to allow other providers to use its fixed copper network on fair terms. This will in turn pass value onto consumers, and, analysts claim, make Bahrain’s internet market one of the region’s most progressive.
Bahrain has the highest broadband penetration of all the Gulf states, with a percentage threatening to top 115, according to a recent Arabian Business report. “(Bahrain’s) broadband market is also relatively competitive with a number of internet providers either using Worldwide Interoperability for Microwave Access (WiMAX), or leveraging on the unbundling regime of Batelco’s infrastructure developed by the Telecommunications Regulatory Authority (TRA),” says Value Partners senior engagement manager Emmanuel Durou. Batelco, however, still accounts for 51 per cent of subscribers.
Bahrain’s television audience may be small, but there is an increasingly exciting race for eyeballs. “There are approximately 130,000 TV households in Bahrain, nearly all of which receive free-to-air (FTA) satellite signals,” writes Informa. “In terms of individual viewers, that would be close to 750,000. Households can access nearly 500 FTA channels. Satellite dishes are officially banned, although the ban has never been enforced.” The researcher estimates that around 38,000 Bahraini homes access satellite pay- TV services.
“Public service broadcaster Bahrain Radio & TV Corporation (BRTC) broadcasts eight channels in Arabic and English – five of them terrestrially and three via satellite,” adds Informa. “The broadcaster has increased local productions, particularly dramas in the key Ramadan period.
“The most popular BRTC channel is Channel 44, which broadcasts 24 hours a day in Arabic. Around 35-40 per cent of its output is locally produced. In January 2009, BRTC issued a tender for the operation of digital DVB-T transmitters for Channel 44. Channel 55 has a similar line-up to Channel 44, but broadcasts in English. The channel also features European sport and one hour of CNN news programming a day. Channel 55 is on air for seven hours a day.
“Despite the small side of the market, efforts are being made to continuously improve the quality of the local channels including recent DTT (Digital Terrestrial Television) and HD initiatives,” adds Durou. “And local competition for airwaves can be viewed as high with six ‘local’ terrestrial channels.”
Likewise, the advertising market in Bahrain is proving increasingly fruitful. “The ad market in Bahrain is expectedly small in absolute value –our estimate is below US$ 80m in 2010 – but of course on a per capita basis, ad spend in Bahrain is significantly higher than the regional MENA average, and on par with the rest of GCC,” says Durou. “In comparison with other markets in the GCC, the relative proportion of TV spend in the overall local advertising spend, if you exclude pan-Arab TV, is definitely on the high side when compared to UAE, KSA or Kuwait, i.e. 15% of the market.”
Bahraini IPTV is in an embryonic stage. “Nuetel Communications launched an IPTV service in 2007,” writes Informa. “Nue-TV, which offers 200 TV channels, supplemented by premium options from ART and Orbit Showtime Network, and video-on-demand, is available only in the Amwaj Islands (a new development off the coast of Bahrain’s northerly Muharraq Island), but the company plans to expand to the Bahrain mainland. Nuetel hasn’t published subscriber figure but our latest forecasts estimate 1,000 IPTV homes in Bahrain.”
Fibre to the Home (FTTH) also remains shackled to the Amwaj Islands, and no announcements to expand have been made as yet. However, the country may be on the verge of an IPTV revolution thanks to Batelco, which migrated its fixed-line infrastructure to an all-IP network in 2008. This should allow it to launch an IPTV service this year, although plans remain hazy.
One area in which the kingdom has been at pains to promote itself is its viability as a regional media hub: ambitious, considering the UAE and Qatar’s successful pushes in recent years, but there is some evidence Bahrain could be joining the Gulf’s elite in coming years. “Bahrain is keen to promote itself as a regional media hub,” writes Informa. “Prior to its merger with Showtime Arabia, DTH provider Orbit relocated to Bahrain from Rome in 2006. London-based pan-Arabic satellite broadcaster MBC also chose the country as the base for its MBC2 channel.”
If OSN was Bahrain’s benchmark, its optimism was shattered when the newly-merged entity chose to relocate its headquarters to Dubai. “Our regional sales office will continue to operate in Bahrain for many years to come,” counters an OSN spokesperson, “and although we had consolidated our broadcast operations into Dubai, our Bahrain broadcasting centre will continue to manage a number of our Arabic channels.” Government interventions, such as the May 2010 closing of Al Jazeera’s Manama bureau, haven’t helped the country’s cause either. Yet it still remains an attractive option for broadcasters, with US giant CNBC’s Bahrain office the biggest testament to this.
Another advantage is Bahrain’s tough stance on piracy, seen as a barometer for the region’s pay-TV operators. “Piracy levels have drastically decreased over the past decade in Bahrain, and the country has a relatively high pay TV penetration,” says Durou. “Consumers are accepting to pay for premium content, at least more than in other MENA markets.” As Digital Broadcast went to press it’s unknown how effective OSN’s December 19th conditional access system will have been, but Bahrain’s biggest pay-TV operator is confident it can eradicate piracy altogether.
With a mixed bag of advantages and disadvantages, and a somewhat fledgling digital media industry set to change with the incoming fair trade push, Bahrain’s media forecast is hard to predict. “Realistically the Bahrain digital media market is still in the early stage of deployment when compared to other markets in the region, like Jordan,” says Durou. “However, there is no doubt that there is a fertile ground given the quality of the infrastructure, Bahrain’s Economic Vision 2030, and its position as a media hub in the region.
“On the supply side, a few risks also loom ahead for the media industry in Bahrain: competition with other media hubs, a need to attract media talent, growing prominence of Qatar in media and a limited local market scale,” adds Durou. “Yet Bahrain has many ingredients to become a digital media test-bed in the region, given high broadband penetration, progressiveness of the TRA, historic media hub status, and a big appetite, we believe, for local content.” With all this in mind, 2011 will be Bahrain’s biggest year yet.