The complaints recently made by Batelco’s chief executive are outrageous and nothing more than a disingenuous effort to bully the telecom regulator and exploit the consumer.
In the past five years, Batelco has earned a total of BD377 million ($1 billion) and despite increasing competition the National Bank of Kuwait (NBK) estimated in a research report last month that the operator would earn BD545m ($1.5bn!) over the next five years.
In the same report NBK calculates that a standard measure of revenue known as blended ARPU (Average Revenue Per User) shows that Batelco’s customers pay an average of more than $42 per month compared to $26 in Taiwan, $27 in Portugal and $33 in Greece.
Batelco’s operating profit margins of around 38 per cent are almost double the average of its international peers and among the highest in the world.
Such figures should not surprise Internet surfers that they are paying twice the price for half the speed offered to customers in Asia or the businessmen whose monthly roaming bills have become a considerable overhead.
Veiled threats about possible job losses and higher prices to consumers are desperate and disgraceful.
The company has done very well from its home market and now commands an enormous stock market value of more than $2.5bn built on our phone bills.
The idea that it would be better for the company to invest overseas is laughable when it has a limited track record of operating internationally and only in highly-regulated markets.
The company shows little appreciation for the fact that the local telecom regulator has yet to impose number portability or that competition is so light that it has not been required to offer the subsidised-handsets that are common in many countries.
Batelco has only yielded its position under pressure and it is understandable that it does not welcome the idea of providing better services at lower prices.
Batelco’s loyal customers have paid plenty and it’s time for payback!
Tarek Fadlallah
Batelco Chief Executive Peter Kaliaropoulos said : “Batelco and many telecommunications companies around the world have made substantial profits over many years - this is a fact. These profits are then used to return dividends to shareholders, re-invest in infrastructure, new technologies and services, fund overseas expansion or acquisitions in related business such as content-related ventures and donation to numerous community and philanthropic causes.
“We should all be proud that Bahrain has one of the best telecommunications networks in the world. This has happened through careful planning and significant re-investment of profits. Batelco, irrespective of regulatory conditions, will continue to invest heavily in Bahrain. In 2006 alone, Batelco invested, some $92m in Bahrain’s infrastructure.
“Batelco will focus more in the future on delivering better services at lower prices to businesses and consumers in Bahrain. This will come about following completion of significant investment programmes in international cable systems, Kingdom-wide New Generation Network, IP-enabling technologies, new data centres, new internet platforms, new VSAT infrastructure, cabling of new industrial and housing estates and many other such programmes. Prices have come down for internet access - some of the lowest prices in the Middle East - lower IDD prices and lower business costs for voice and data. Prices will continue to be revised based on the completion of investment programmes and lower operating costs. Customers will continue to benefit, through lower prices and more choice from Batelco and other telcos in Bahrain.
“The NBK report into Batelco’s ARPU is misleading. Batelco’s blended ARPU is a lot lower than what NBK has estimated … and compares very well with the ARPU’s of countries such as Taiwan, Portugal and Greece with a combined population of 45m consumers in their home markets which enable them to apportion network costs more efficiently than Batelco in Bahrain with approximately 800,000 people.
“Batelco today has operations in six countries - all competitive markets - and is very much aware of consumers’ ongoing preference for better quality and lower prices. We have done so in the last three years and we are listening to our customers who continue to expect even lower prices - we will not disappoint them. We believe ultimately our customers’ ongoing loyalty will help us build a stronger and profitable company all Bahrainis are proud of!”
Appeared in the Letters page in the GDN on 6 June 2007