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AS Bahrain prepares to see more liberalisation in the telecom sector with the issuing of the third mobile licence, the spat between the dominant player Batelco and the Telecom Regulatory Authority (TRA) over procedure, policies and control carries on unabated.
Only recently did Batelco decide to withdraw newspaper advertisements for a broadband internet service for which it had yet to receive regulatory approval.
While withdrawing the advertisement Batelco complained that it does not have the power to make available to its customers new products and new prices.
Unlike other telecommunications licensed operators, everything Batelco wishes to offer its customers in Bahrain requires the approval of the TRA, consistent with conditions of its licence.
Batelco has been stopped on a number of occasions from launching new products and lowering tariffs by the TRA. Multiple detailed information requests often involve significant delays or conditional approvals or rejections, Batelco maintains.
The TRA on the other hand, while asserting that telecom liberalisation has ushered in a new era of progress and development in Bahrain, admits that the policies aimed at bringing more competition and openness have failed to yield to the expected levels, apparently referring to the dominance of Batelco in mobile, broadband, fixed-line and other areas.
Even as Batelco and the TRA keep on bickering, work on the $11 billion infrastructure development projects is proceeding apace, which will offer numerous opportunities to ICT and telecom industry players.
Since 2003, TRA has issued licences to 63 companies of 11 types of licences and out them 17 are up and running. The overall growth of the telecom sector in 2007 was 13 per cent and 28 per cent since 2003.
Albeit, telecom liberalisation has been having particularly marked effects in developing countries.
One study of six emerging markets by consultants Deloitte estimates that a 10 per cent increase in mobile penetration can boost GDP growth rates by 1.2 percentage points.
Rapidly growing mobile phone use fostered by liberalisation as new companies, domestic and foreign, enter the market creates jobs and rising revenues for telecom companies.
That in turn provides tax revenues for governments, raises the incomes of other businesses through enhanced productivity and creates yet more jobs and revenues as the telecom companies and other businesses buy more services.
Recent average annual growth of mobile subscribers in Ukraine of 70 per cent has boosted productivity by nine per cent a year.
The example of Ukraine can be mirrored by dozens of developing and transition economies around the world.
Liberalisation in Mauritius saw the cost of international calls drop 80 per cent and of mobile calls fall by more than 50 per cent.
Access to mobile phones has empowered poor people in developing countries, and boosted their incomes.
Farmers can find the best price at different markets before they set off, and are not dependent on middlemen, for example.
Pakistan, which fully liberalised its telecom market, has seen mobile subscribers jump to 79 million from 2.4 million. Telecom contributed two per cent to GDP in 2007, or five per cent including indirect effects, compared with almost nothing before the reform. Of course, the reform has enriched companies, too.
Egypt's Orascom Telecom, with operations in several emerging markets that have constantly far outstripped growth expectations, will soon have over 80 million subscribers, more than 150 times what it started with in 1998.
And yet the market is far from perfect. Companies still face restrictions on access or ownership in many countries.
At the same time, operators say existing rules on liberalisation in telecom need to be enforced and broadened to ensure continuing growth in the sector as it readies for billions of dollars of investment in next-generation networks.
That transformation will simply not occur without a global move to remove the remaining barriers to foreign investment in trade in telecommunications.
And as telecoms converge ever faster with information technology, media and content, it must wrestle with new issues such as free speech, hate speech, pornography, public safety and national security.
The liberalisation of a country's telecom industry can enable economic growth across various sectors, but its success depends on regulatory policies that are conducive to the development of competition, notes Booz Allen Hamilton.
One element of such a policy would be the creation of regulatory and economic incentives that encourage the sharing of infrastructure among telecom companies as a key lever to foster competition and optimise investments.
Operators may perceive the economic benefits and adopt a collaborative approach autonomously; however, a clear policy, a commercially friendly price-regulation mechanism, and tailored regulatory safeguards may be necessary to successful infrastructure sharing.
These measures are especially necessary now.
While liberalised markets with effective regulatory structures have traditionally observed several forms of infrastructure sharing, including co-location and national roaming, more advanced forms are emerging.
They involve various passive and active network components, provide significant revenue-generation opportunities for incumbent operators, and facilitate the development of virtual operators and next-generation service providers.
International experience suggests that favourable regulation and economic incentives have enabled such developments in infrastructure sharing.
