Tough competition hurts Bahrain's Batelco

Bahrain Telecommunications, the state-owned operator known as Batelco, reported a 13 per cent decline in second-quarter profit as it faced fierce competition in a stagnating market.
Net income at the former monopoly fell to 18.5 million Bahraini dinars (Dh180.2m) in the quarter, from 21.3m dinars a year ago. The company has reported declining profits in seven out of eight quarters. "In our home market, Bahrain, we continue to face significant competition from other operators coupled with lack of any significant growth," Batelco's chairman Shaikh Hamad bin Abdulla Al Khalifa said.
"As a priority, we are implementing various initiatives to improve efficiencies, lower our operating cost structure and be more responsive to our customers with a full service portfolio."
The kingdom has three mobile operators - Batelco, and units of Kuwait's Zain and Saudi Telecom - in addition to about 10 internet providers serving a population of around 1.3 million.
These limitations led Batelco to expand abroad and it also owns the Jordanian telecoms operator Umniah, 27 per cent of the Yemeni mobile firm Sabafon, minority stakes in internet providers in Kuwait and Saudi Arabia and is also active in Egypt. Yet Bahrain remains central to Batelco despite this diversification, providing 61 per cent of the group's half-year revenue of 155.3m dinars. Home revenue was 94.7m dinars, down 7.5 per cent from a year ago.
"We are actively pursuing opportunities to build our network through strategic acquisitions," said Shaikh Mohammed bin Isa Al Khalifa, the Batelco chief executive.
The company said its balance sheet remained very strong with low gearing. Debt stood at 27.5m dinars while cash and bank balances stood at 87.4m dinars.
* with Reuters
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