Bahrain - A Telecom leader in the Middle East
Vincent Zha and Isabelle Paradis
February 2007
More info in our Bahrain report >>

Bahrain 's telecom market is mainly characterized by three aspects. In the first place, it has a saturated mobile market in terms of penetration rate. In fact, the country has one of the highest mobile penetration in the world and the second highest fixed line penetration in the region. Secondly, unlike most telecom markets in the Gulf, competition has been introduced in most sectors. Thirdly, even though competition is established, the market is still dominated by the incumbent Batelco.

In the beginning of 2004, the Telecommunications Regulatory Authority (TRA) outlined its plans to complete the deregulation of the country's telecoms markets. A total of 56 companies had obtained licences to compete in Bahrain 's market by December 2006. The country is keen to further liberalise its telecoms markets in a bid to attract much-needed foreign capital.

The fixed penetration rate peaked at 27.2% in 2004 and started its descent from then on. It decreased to 26.8% in 2005 and again to 26.2%, with a 1.0% reduction in the number of lines to 191,000, at the end of June 2006. The main reason for this decline lies in the increasing fixed/mobile substitution. The arrival of new fixed wireless competitors in 2007 should however help stimulate this sector.

By the end of June 2006, the mobile market reached a total of 860,000 subscribers, representing an impressive 117.8% penetration and exceeding most experts' forecasts. If this tendency continues, we expect the number of mobile customers to have surpassed 900,000 and a penetration of 122.7% by the end of 2006.

The growth trend should continue to slow however, with a forecasted average growth rate of 7.8% over the next 4 years to reach 1.1 million mobile customers at the end of 2010.

Facing a penetration rate of over 100%, which indicates fewer opportunities for traditional 2G market, along with a strong economic environment, the 3G sector in Bahrain is developing at an accelerated pace. At the end of June 2006, there were 30,000 3G subscribers in the kingdom, representing 3.5% of all mobile subscribers. Meanwhile, since July 2006, the TRA has been pondering licensing additional mobile operators in 2007 to encourage more competition.

There were 47,000 Internet subscribers and an estimated 150,000 users at the end of June 2006, translating into 6.4% penetration. We estimate the number of broadband subscribers to have reached 27,000 at the end of June 2006, representing 63.4% of all Internet subscribers. This number is forecasted to have reached 59,000 or the totality of all Internet customers by the end of 2010.

Find out more about this market in our new 25-page Bahrain telecom country profile report: More info >>