Bahrain Halts Telecom Spectrum Auction As Operator Appeals

Bahrain has halted an auction to sell radio spectrum for next-generation telecom networks after a wireless broadband operator appealed against its exclusion from the sale, delaying improvements in the kingdom’s communications infrastructure.

The Telecommunications Regulatory Authority (TRA) was due to auction 12 lots of spectrum primarily for long-term evolution (LTE), or 4G, networks from March 31 and the winners were expected to be announced in mid-April.

But the regulator, which previously described the country’s communications infrastructure as inadequate, has now halted the process “pending further notice” following an appeal by menatelecom, according to a statement on its website.

LTE potentially allows data speeds to more than double and is likely to be used in many markets as an alternative to building out expensive fixed-line fibre-to-the-building networks.

The spectrum auction was originally open to all bidders, potentially allowing new entrants into an already crowded market.

The three mobile operators – Bahrain Telecommunications Co (Batelco), Kuwait’s Zain and Viva Bahrain, an affiliate of Saudi Telecom Co – all opposed this and they appeared to get their wish when the TRA last month issued a notice saying the government had decided to limit the auction to this trio.

But menatelecom, which uses WiMax technology to provide long-distance wireless broadband, has filed three related cases in Bahraini courts, the TRA told Reuters, which appeal against this decision and also request that the auction be delayed.

The next court hearing is on Thursday, the TRA said.

Menatelecom, a subsidiary of Islamic bank Kuwait Finance House, declined to comment.

Bahrain’s 1.3 million population is also served by about 10 internet providers in arguably the most liberalised telecoms market in the Gulf.

This has cut prices for consumers, but sector earnings are shrinking and mobile penetration is about 160 per cent, or 1.6 subscriptions per resident, so there is little scope for growth in terms of customer numbers.

Batelco’s domestic profit fell 32 per cent in 2012, outpacing a 12 per cent drop in revenue, while Zain’s net income in Bahrain more than halved in the first nine months of the year.