Boston, MA -- (SBWIRE) -- 07/23/2012 -- In this quarter's update to BMI's Bahraini Telecommunications report, we analyse trends in the country's mobile, fixed-line and internet sectors and the effect of regulatory, industry specific and macroeconomic developments on the overall telecoms sector. We also update our five-year growth forecast, through to 2016, based on full-year 2011 market data published by the Telecommunications Regulatory Authority (TRA) of Bahrain and the latest financial and operational data published by the country's two biggest mobile operators - Batelco and Zain Bahrain.

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Bahrain's telecoms market has shown strong resilience in terms of subscriber growth in the face of heightened political and economic risks in the country as a result of continued anti-government protests by a section of the population. The country's leading operators reported positive growth in Q411, especially in the mobile voice and data segments. However, this has not been matched by the financial performance of the country's telecoms service providers, a development we attribute to lower revenue, because of promotional activities and rising input costs because of the adverse macroeconomic environment. Batelco's Q112 results were hit by the operator's exit from the Indian market in February. The operator's consolidated revenue fell by 4% y-o-y to BHD78mn, compared to BHD80.8mn in Q111. Group net profit and EBITDA also fell by 8% y-o-y and 15.2% y-o-y to BHD16.2mn and BHD28.3mn respectively.

In March 2012, the government announced plans to develop a technology neutral licence award process for the 70MHz of 2.6GHz paired spectrum, 40MHz of 2.1GHz paired spectrum, 15Mhz of 1.8GHz of paired spectrum, 5.6MHz of 900MHz paired spectrum, and 15Mhz of unpaired spectrum at 1.9GHz. The TRA expects to award the first tranche of 40MHz at 2.6GHz in late 2012 or early 2013.

According to regulatory data, there were 1.694mn mobile subscribers in Bahrain at the end of 2011, up by 8% year-on-year (y-o-y) from 1.567mn at the end of 2010. The mobile sector remains dependant on prepaid subscriptions, which accounted for 81.5% of total mobile subscriptions at the end of Q411. Over the next five years, we expect growth to be limited by the discounting of inactive lines and a shift in focus to high-value postpaid subscriptions. We therefore expect mobile growth to slow in the latter years of our forecast period. BMI expects 1.75mn subscribers by the end of 2016, with penetration sliding to 123.1%.

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