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Stiff competition 'may hit Batelco revenue'

Manama, June 11, 2012

Batelco, the leading telecom service provider in Bahrain, could continue to face stiff competition, resulting in a decline in its domestic revenue, Global Investment House said, downgrading the stock to 'buy' from 'strong buy'.

Bahrain's telecoms sector is arguably the most liberalised in the Gulf, with three mobile operators - Batelco, Kuwait's Zain and Viva Bahrain, an affiliate of Saudi Telecom Co - as well as about 10 Internet providers serving a population of about 1.3 million.

The launch of Viva Bahrain in March 2010 has had a major impact on the sector landscape, with the new entrant grabbing 27.3 per cent of the subscriber base by the end of 2011, analyst Umar Faruqui said.

'Although we expect market share erosion for Batelco to slow down significantly going forward, the competition is likely to remain stiff,' Faruqui wrote in a note to clients.

Batelco's Jordan operations are expected to remain the main revenue growth driver on a likely boost from the launch of 3G services due later this year, he added.

The company, which is majority government owned, has reported declining profits in seven of the past eight quarters and is pursuing foreign acquisitions to offset falling home revenue. – Reuters




Tags: Bahrain | Batelco | Global Investment House | Viva | downgrade |

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