Document

Board of Directors
Dr. Mohammed J.K. Alghatam
Dr. Rasheed Jassim Ashoor
Shaikh Hamad bin Abdulla Al Khalifa
Shaikh Ahmed bin Mohammed Al Khalifa
Mr. Mohammed Hussain Yateem
The Board of Directors of the Telecommunications Regulatory Authority (the TRA) was appointed by His Majesty
the King, Shaikh Hamad bin Isa bin Salman Al Khalifa, based on the proposal submitted by the Minister of
Transportation, and after the approval thereof by the the Council of Ministers of the Kingdom of Bahrain.
On December 9, 2002, the Board of Directors of the TRA was formed by a Royal Decree No. 50 for 2002
as follows:
Dr. Mohammed J.K. Alghatam (Chairman)
Shaikh Ahmed bin Mohammed Al-Khalifa
Mr. Rasheed Mohammed Al-Meraj
Dr. Rasheed Jassim Ashoor
Mr. Mohammed Hussain Yateem
The appointment of the Chairman and the first member shall be for a four years term and the other three
members shall be for three years.
His Majesty the King, Shaikh Hamad bin Isa bin Salman Al Khalifa, appointed Shaikh Hamad bin Abdulla
bin Mohammed Al Khalifa as a board member succeeding Mr. Rasheed Mohammed Al Meraj, who resigned
in January 2004, on 26 May 2004, pursuant to Royal Decree No. 27 for 2004. The appointment of Shaikh
Hamad bin Abdulla bin Mohammed Al Khalifa, in accordance with the Telecommunications Law, is for the
remainder of the term of his predecessor.
2
AnnualAnnual
ReportReport
2004 2004
The Telecommunications
Regulatory Authority (TRA)
The TRA was set up in October 2002 by Legislative Decree No. 48 under the Telecommunications Law. The
TRA is an independent body overseen by the Board of Directors. The General Director of the TRA is responsible
for the day-to-day operation of the organisation. The General Director is appointed by His Majesty the King
Shaikh Hamad bin Isa bin Salman Al Khalifa, based on the recommendation of the Board of Directors of the
TRA and the proposal of the Prime Minister, and after the approval thereof by the Council of Ministers. The
current General Director, A. Andreas Avgousti, was appointed to the post in November 2003.
The duties of the TRA include protecting the interests of subscribers and users of telecommunications services
and maintaining effective and fair competition between established operators and new entrants to the
telecommunications market in the Kingdom of Bahrain.
The TRA carries out its duties and exercises its powers in a fair, transparent and non-discriminatory manner.
BOARD OF DIRECTORS
GENERAL
DIRECTOR
DIRECTOR
Finance
Administration
& Human
Resources
OFFICE
MANAGER
DIRECTOR
LEGAL
AFFAIRS
Lawyer
DIRECTOR
COMMUNICATIONS
&
CONSUMER
AFFAIRS
Consumer
Affairs
Coordinator
Assistant
Finance
& Human
Resources
Office
Administrator
Driver
Messenger
Translator
DIRECTOR
MARKET
OPERATIONS
DIRECTOR
ECONOMIC
AFFAIRS
Senior
Regulatory
Accountant
Market
Operations
Advisor
Market
Operations
Coordinator
LICENCING
ADVISOR
Administrative
Assistant
Figure 1: The structure of the TRA
Annual Report 2004
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A. Andreas Avgousti
General Director
General Director’s Statement
It is my pleasure to welcome you to the second annual
the next few years. We are already beginning to get
report of the Telecommunications Regulatory Authority
a taste of what is to come with two competing
of the Kingdom of Bahrain – the TRA. This has been
operators now offering a range of mobile telephony
a very exciting year for the TRA and, indeed, an
services.
historic one for telecommunications in Bahrain. It has
been the year of TRAnsition to a fully competitive
The Kingdom of Bahrain is an area of rapid economic
market. On 1 July we were able to declare that the
growth,
Bahrain telecoms market was open. We had achieved
telecommunications are essential in supporting and
full liberalisation less than two years after the first
encouraging that growth. Rapid business growth
moves were made in October 2002. Bahrain is now
also
firmly leading the way as the first country in the Gulf
telecommunications services and opportunities for
and Middle East region to have a fully liberalised
market entrants. While the Kingdom of Bahrain is
telecoms industry.
not a large market in global terms, it has considerable
and
means
high-quality
an
increasing
up-to-date
demand
for
strategic importance as the market leader for
This would not have been possible without
liberalisation in the region.
the active and unfailing support of all the
members of our Board of Directors, led by the
Up to this point, our activities at the TRA have
Chairman, Dr Mohammed J. K. Alghatam. The hard
focused on achieving our milestones in the
work and enthusiasm of all the staff at the TRA, too,
liberalisation process. Now we need to concentrate
have ensured we met our milestones. I would like to
on nurturing the competitive market and ensuring
say a personal ‘thank you’ to all these people.
consumers are seeing the rewards. There is no room
for complacency, as we will need to monitor the
4
Opening up the market has meant creating many
market carefully, stay alert to any barriers to fair
new opportunities for investment and innovation. In
competition and tackle anti-competitive behaviour
turn, a vibrant market means customers – both
effectively. While new entrants must be allowed to
business and domestic – are offered more choice,
compete on fair terms, we also need to take account
rising standards and a world-class range of modern
of the interests of Batelco, the incumbent operator.
telecommunications services. We hope to see these
At the same time, the TRA will have to keep abreast
economic and consumer benefits fully realised over
o f n e w d e v e l o p m e n t s i n t h e e v e r- c h a n g i n g
Annual Report 2004
telecommunications world, which will require it to
phones and featuring ‘Mr Mobile Menace’. A
take them into consideration in its decision making
highlight of the year was the setting up of our first
or event call for regulatory action.
consumer group to advise us on issues relating to
carrier pre-selection. Consumer advisory
The next few years will be years of growth and
groups are an important element in establishing a
consolidation, building on what has been achieved
strong dialogue with users of services, in order to
so far, raising awareness of the opportunities offered
increase mutual understanding and reach well-
by the new environment and ensuring a fair market
informed decisions.
develops for competitors and consumers alike.
From the outset, openness and transparency have
Like any two-year-old, now we have started walking,
been the watchwords in all the TRA’s activities. We
we need to start talking too. During the year we
have honoured our commitment to consult fully, and
began raising awareness of Bahrain’s new regulatory
this year we have improved our website, giving people
environment both here and around the world. To this
easier access to TRA information and publications.
end we chose to speak at a number of selected
We have also taken a groundbreaking step in setting
international conferences and will continue to do so
up a panel of international experts to scrutinise the
selectively next year, so that we can continue
TRA’s processes and activities – and all their
promoting the newly founded regulatory regime.
recommendations will be published, of course. More
International relations with other regulators are also
on this in next year’s report.
important in sharing experience and making sure
Bahrain telecoms keep up to date with the latest
The telecommunications sector of Bahrain and the
world telecoms developments. 2004 saw our first
TRA still have many challenges ahead in expanding
two agreements with colleagues in other jurisdictions,
competition, regulating the market and promoting
which will enable us to better learn from each other.
the interests of consumers. Our market is also
inevitably affected by the ebb and flow of economies
All these steps ultimately benefit our subscribers
around the world. But we have made a very
and users in Bahrain by setting up a healthy industry
promising start indeed, and there is much success
which competes to meet customer needs, thus
to celebrate already.
increasing choice and ensuring they have access
to the best on offer. With consumers always at the
Last year, in the TRA’s first report, I said our aim was
back of our minds in terms of what we are doing,
to make the Kingdom of Bahrain the moder n
this year has been an important one for the TRA’s
communications hub for the region. That is still our
activities on that front too. We ran our first consumer
aim, and I am pleased to report that in 2004 we made
campaign, promoting considerate use of mobile
very significant progress in that direction.
A. Andreas Avgousti
Annual Report 2004
5
Shaping the
Foundation of
a Liberalised Market
nsforming
the Vision to
Reality
Highlights of 2004
January
• The TRA moves to new offices in Taib Tower
• Mr Rasheed Al Meraj resigns from the Board of Directors
• Public Access Mobile Radio (PAMR), paging, international facilities and Very Small Aperture Terminal
(VSAT) licences are made available
March
• The TRA launches its revamped website
• The Bahrain Internet Exchange licence is issued
• The TRA issues the 3rd Interim Interconnection Order to facilitate interconnection between Batelco
and MTC-Vodafone Bahrain
• The consultation process on GSM Mobile Jammers begins
April
• The VoIP position paper is issued
May
• Sh. Hamad bin Abdulla Al Khalifa is appointed by Royal Decree to the Board of Directors
• The consultation process on dominance in certain market and provision of access services begins
June
• The new 8 digit numbering scheme is fully operational, old numbers are ceased
• The consultation process on local loop and relation facilities and services begins
• A Memorandum of Understanding is signed between the TRA and the Greek National Telecommunications
and Post Commission (EETT)
• The Carrier Pre-Selection Regulation is issued
• The TRA approves Batelco’s Reference Interconnection Offer (RIO)
• The TRA issues the 4th Interim Interconnection Order to facilitate interconnection between Batelco
and MTC-Vodafone Bahrain
• The consultation process on Mergers and Acquisitions begins
• The updated Numbering Plan is issued
July
• The liberalisation of Bahrain’s telecommunications sector is completed with the availability of licences
for national fixed services (NFL) and international services (ISL)
• Batelco and MTC-Vodafone Bahrain sign interim interconnection agreement based on the RIO and the
TRA’s 4th Interconnection Order
• The TRA is called upon to resolve the interconnection dispute between Batelco and MTC-Vodafone
Bahrain
August
• The Accounting Separation Regulation is issued
• The first Consumer Advisory Group is set up, for Carrier Pre-Selection (CPS)
September
• The TRA announces that all its publications will be available upon request in Braille and large print
format, free of charge
• The Regulation on Mergers and Acquisitions is issued
October
• A Memorandum of Understanding is signed between the TRA and the Jordanian Telecommunications
Regulatory Commission (TRC)
• The TRA issues its Preliminary Analysis on the interconnection dispute between Batelco and MTCVodafone Bahrain
November
• The Mobile Phone Jammers Regulation is issued
December
• The consumer awareness campaign ‘Use Your Mobile Phone Wisely’ is launched
• The setting up of the annual Development Review Panel is announced
Annual Report 2004
7
Knitting a Sturdy,
Stable Market
nsformation
into Liberalisation
The road to full liberalisation
On 1 July 2004, the TRA was able to announce that
the telecommunications sector in the Kingdom of
Bahrain was fully liberalised. All the milestones laid
out in the legislation had been met and each step
had been reached within the legal deadlines. This
historic achievement was marked by a reception with
speeches from a representative of the International
Telecommunications Union (ITU) and the Chairman
of the Board of the TRA, who declared that Bahrain
telecommunications ‘are fully open’.
At this time the Kingdom of Bahrain was the only
Annual Report 2004
country in the Middle East with a fully liberalised
telecommunications sector. The new regulatory
regime was advertised in the local, regional and
international media. Other promotional activities on
the international scene included speaking
engagements and participation in specialized forums.
The critical elements for a fully liberalised market were
licences available to competitors in all major
telecommunications services, and a regulatory
framework in place that ensured fairness and protected
consumers’ interests. By 1 July 2004 the TRA had put
9
Licence
Service covered
Availability
Mobile Telecommunications
Provision of mobile
telecommunications via a network
owned and operated by the
licensee
Two licences have been granted – to
Batelco and MTC-Vodafone Bahrain.
No further licences are currently
available (according to the
Telecommunications Law until at least
April 2005)
National Fixed Services
(NFL)
Provision of national voice and data
services via a fixed network owned
and operated by the licensee
No restriction on number of licences
International
Telecommunications
Services (ISL)
Provision of international voice and
data services with specified
bundling of traffic
No restriction on number of licences
Paging Services
Provision of commercial paging
services to subscribers
No restriction on number of licences
Public Access Mobile Radio
(PAMR) Service
Provision of radio communication
services to a closed user group –
for dispatch applications (e.g. truck
and taxi fleets)
No restriction on number of licences
International
Telecommunications
Facilities (IFL)
Provision of facilities including
termination, landing, international
connection and connection to
Bahrain licensed networks for
international services
No restriction on number of licences
Very Small Aperture
Terminal (VSAT)
Provision of a digital satellite data
network using an antenna with
small diameter – for private
use only
No restriction on number of licences
Internet Service Provider
(ISP)
Provision of internet services, not
including voice
No restriction on number of licences
Value Added Services (VAS)
Provision of additional services over
an existing network (e.g. Audio
Text, Bulk SMS, card transactions)
No restriction on number of licences
Internet Exchange
Connection for aggregation,
transmission and distribution of
internet communications for ISPs
One license issued. No further
licenses available according to the
Telecommunications law until March 2006
Figure 2: Licences Available in the Kingdom of Bahrain.
in place both the cornerstones of the licensing regime
and the most important regulations and other legislation
required to support an open and dynamic industry.
The TRA also made considerable progress in beginning
to promote consumer issues during the year.
Following the granting of a second mobile telephony
licence in April 2003, MTC-Vodafone Bahrain started
offering service in December that year. There were
now two operators in the mobile sector – Batelco,
the incumbent operator, and MTC-Vodafone Bahrain.
Licensing
The year 2004 began with another significant step
towards liberalisation, with the announcement on 1
January that four new types of licence were now
available. These were:
A t t h e b e g i n n i n g o f 2 0 0 4 , B a h r a i n ’s
telecommunications users were just beginning to
benefit from the introduction of real competition.
10
Annual Report 2004
•
•
•
•
Public Access Mobile Radio (PAMR) Services
Paging Services
International Telecommunications Facilities, and
Very Small Aperture Terminals (VSAT).
On 1 July this was followed by the announcement
that telecommunications operators could now apply
for licences to run national fixed services and
international telecommunications services. This was
the last major step on the road to full liberalisation
for the core licensing regime to be in place in July.
The full range of licences now available in the
Kingdom of Bahrain is shown in Figure 2.
All licences are granted for 15 years and there are
no local ownership restrictions. However, all licensees
must be established juristic entities in Bahrain, which
in the case of foreign entities may mean for example
establishing a branch office in the Kingdom.
In March 2004 the TRA granted a licence to the Bahrain
Internet Exchange (BIX) to operate the Kingdom’s
internet connection point for internet services providers
(ISPs). BIX will act as the hub for local internet
connectivity for all internet traffic within the Kingdom.
The granting of this licence marked an initial critical
step in the establishment of an advanced, competitive
ISP market in the Kingdom. According to statistics
provided by the relevant companies, Bahrain had
nearly 50,907 internet users in 2004.
Throughout the year, the TRA continued to assess
applications for a variety of types of licence. In total,
the TRA issued 26 licences in 2004. The full list of
current licensed operators as of 31 December 2004
is given in Annex A.
Interconnection
A cornerstone for effective competition is setting fair
terms for how competing telecommunications
operators link their networks. The terms on which
one operator delivers calls originating on the network
of the other operator, and vice versa, are set out in
the interconnection arrangements between relevant
operators. Without these terms in place, subscribers
to one operator’s network cannot communicate with
subscribers on another operator’s network, thus
severely limiting the available services. Effective
interconnection between telecommunications
Annual Report 2004
operators’ networks is therefore essential to
the development of a competitive market.
The TRA issued a series of interim interconnection
orders (Orders) setting out the terms between the two
competing operators in the mobile sector – Batelco
and MTC-Vodafone Bahrain –, as the two parties were
not able to agree on interconnection terms between
themselves. The first two Orders were issued during
2003. Order number 3 was issued in March 2004. The
final Order, number 4, was issued in June 2004. Based
on the last Order, the two companies were able to
sign an interim interconnection agreement. The signing
took place on 15 July.
At the same time as the TRA’s Order number 4, the
Authority was able to announce that it had given
approval to Batelco’s Reference Interconnection Offer
(RIO). A RIO sets out the technical and commercial
terms for interconnecting operators. Batelco had
submitted the final version of its RIO at the end of
May 2004. Under the Telecommunications Law, a
dominant operator, currently Batelco, must publish
a RIO every six months, which each time requires
TRA assessment resulting in approval or the issuing
of an Order specifying terms and conditions that the
TRA does not approve.
Interconnection is a key issue in the creation of a
dynamic, competitive market, so the approval of the
RIO marked a major step forward for the Kingdom’s
telecommunications sector.
However, as Batelco and MTC-Vodafone Bahrain
were unable to reach a full interconnection agreement,
in July 2004 they notified the TRA of their dispute,
which consisted of a number of submissions over a
few months on a wide range of interconnection
matters, including for example mobile termination
charges and leased lines charges. The TRA and both
operators spent considerable time reviewing all
aspects of interconnection. This resulted in a
Preliminary Analysis of the issues in dispute, which
the TRA issued to the parties on 27 October 2004.
Following the Preliminary Analysis, the TRA received
further submissions from Batelco and MTC-Vodafone
Bahrain, and in early 2005 the Authority issued its
final Determination on this matter.
11
Moulding
Competition
nsforming
into a
Competitive
Environment
Promoting fair and effective competition
There were a number of regulations issued during
2004 that were aimed at improving the competitive
environment. In addition, other initiatives were
started to examine further regulation that may be
required. The aim of the TRA was to create a
regulatory framework that ensured operators could
compete fairly with no barriers to market entry, and
that operators, investors and users benefited
from liberalisation.
Carrier Pre-Selection
On 14 June the TRA issued the final regulation on
Carrier Pre-Selection (CPS). CPS allows consumers
to pre-select a menu of different operators for
different types of service they may wish to use. For
example, a consumer might select one operator for
d o m e s t i c c a l l s , a n d a d i ff e re n t o p e r a t o r f o r
international calls. This allows consumers to reap
the full benefits of competition by enabling them to
choose the combination that suits them, on grounds
of price, quality and facilities on offer.
As always, there was a period of consultation before
the final regulation was introduced. The draft
regulation was issued for consultation on 28 March,
following the first consultation on key aspects of
CPS at the end of 2003. A total of 14 responses
were received, and these influenced the shape of
the final regulation.
The regulation itself was groundbreaking in that it
also set up the first Consumer Advisory Group. The
purpose of the Group was to make recommendations
to the TRA on various aspects of CPS, including a
Annual Report 2004
code of conduct. Details about the Group are given
in the next section on Working for Consumers.
Accounting separation
The final Accounting Separation Regulation was
issued on 2 August, following two stages of
consultation. This requires all companies operating
telecommunications services in Bahrain to submit
separate financial reports for each separately licensed
activity, unless an exemption is granted on specified
grounds. Batelco, for example, holds 9 separate
services licences. The Regulation sets out the basic
recording and reporting framework for regulatory
financial information.
These regulatory reports are an essential part of
ensuring fair competition in the telecommunications
market. They allow the TRA to assess the situation
in relation to costs of services offered, and enable
competing and potential operators to have the
necessary confidence that their dominant counterparts
do not cross-subsidise their services in an anticompetitive manner. The TRA is able to use the
information to monitor whether the tariff charged for
a service is reasonable and based on the real costs
of providing that service. This prevents operators
offering services in both competitive and noncompetitive markets from using profits made in noncompetitive ones to cross-subsidise, and thus offer
below costs, services in markets where they face
competition. Cross-subsidisation of this nature has
potentially serious anti-competitive implications.
Accounting separation also gives companies
considering investing in the Bahrain
13
telecommunications industry confidence that they
will not encounter this type of anti-competitive
behaviour as a new market entrant. The TRA can
thus carry out its duty of monitoring the market more
effectively and apply standards in line with best
practice in world telecommunications.
The TRA undertook a review of Batelco’s regulatory
accounting procedures during the year. With the
advent of accounting separation and the growth in
competition, it is particularly important these are
robust and rigorous.
Mergers and acquisitions
Another Regulation that ensured the competitive
environment in the Kingdom of Bahrain would be
furthered, concerned mergers and acquisitions. The
Mergers and Acquisitions Regulation in relation to
telecoms was published on 28 September and came
into effect on 1 October. It put in place a number of
safeguards to protect the interests of both consumers
and other competitors when various structural
changes in the industry occur. These include mergers,
acquisitions and alliances to set up joint ventures
between different entities.
Under the Regulation, in line with regulators
worldwide, the TRA is able to analyse all such
transactions before they go ahead. Where the TRA
considers that the proposed transaction could
adversely affect the competitive structure of the
telecoms industry in the Kingdom, thereby putting
consumers at a disadvantage, the Authority has the
power to prohibit the potential transaction or impose
conditions intended to remove the potential anticompetitive concerns.
As with all other Regulations, there was a series of
consultations before the final Regulation was issued.
The aim was to ensure that it was fair, workable and
in line with the best international practices of wellestablished telecommunications and competition
regulators elsewhere.
14
to its telecommunications network and services on
fair and reasonable terms. A licensee in a dominant
position is one who is able to act independently, to
a material extent, of competitors and users in the
relevant market.
At the end of May the TRA began consulting in order
to determine market dominance for certain sectors of
the Bahrain telecommunications industry and the
terms on which access services should be offered.
This was an important initial step in promoting fair
competition and attracting new market entrants. It
enables new operators and providers of services not
requiring a network of their own – for example value
added services (VAS) and internet service providers
(ISP) – to enter the market with confidence. Market
entrants can build their services and business models
on Batelco’s services. They can also resell Batelco’s
services, adding value in ways that increase the
choice for end users.
The consultation also addressed issues of access to
directory enquiries, emergency call services and
international direct dialling (IDD).
Local loop and related facilities & services
The ‘local loop’ is the connection between a
subscriber’s premises and the network operator’s
distribution point at the local exchange. In June the
TRA started consulting on the issue of new market
operators having access to the ‘local loop’ of the
incumbent operator, Batelco, which is likely to be
dominant in this part of the market for some time.
The consultation sought views on the options for
giving other licensed operators access to these
facilities and services.
Defining fair and reasonable terms for access is
critical to stimulating competition in:
Market dominance
•
•
•
•
Fixed telephony services
Leased lines
Switched data services
Dial-up or broadband DSL (Digital Subscriber
Lines) internet access.
Under the Telecommunications Law, an operator
determined to be dominant in a relevant
telecommunications market may be required to offer
other operators holding an appropriate licence access
The specific facilities and services being considered
in the consultation were wholesale DSL, simple DSL
Annual Report 2004
resale, unbundled local loop (ULL), sharing of
wiring ducts and sharing of other elements of the
physical infrastructure.
The TRA has received the comments on the
consultation and will be publishing the report in 2005
along with the relevant draft regulation.
Numbering plan
Another potential barrier to competition can be a
restriction on the supply of telephone numbers or
control of their use in a way that favours one operator
over another. In Bahrain steps have been taken to
remove both obstacles.
At the end of 2003 the TRA introduced the new 8digit National Numbering Plan. The key feature of the
8-digit format is its stability. It secures a pool of a
hundred million numbers for Bahrain, which should
satisfy present and future demand. Nowadays people
may require several numbers each – a fixed phone
number at home, a separate fax number, a mobile
number, office number, pager number, separate
internet connection, and so on. Many countries,
including the UK, have had to change their numbering
plan more than once within a decade.
From December 2003 to the end of May 2004, there
was a period of parallel running when both old and
new numbers were operating. This gave subscribers
in Bahrain an opportunity to become familiar with
the new system and change all signage, stationery
and other listings. It also gave callers from outside
Bahrain the opportunity to update their contact details
for the Kingdom.
Annual Report 2004
The TRA, together with Batelco and MTC-Vodafone
Bahrain, launched an awareness campaign—“The
Numbers”. This raised the awareness of the
numbering change in the Kingdom through extensive
media coverage, including press ads in local and
regional media, as well as the distribution of posters
in public access areas such as hospitals, schools
and post offices. The campaign also published a
guide with detailed steps that needed to be taken
by both residential and business customers in
preparation for this change.
From 1 June 2004 the old system ceased to operate.
Subscribers dialling an old number in error received
a recorded message giving instructions on how to
derive the equivalent new number.
The TRA owns and administers all Bahrain telephone
numbers. Although there are now plenty of numbers
available, they need to be carefully managed to avoid
any wastage, to allow flexibility, and to encourage
innovative services in the future. This will ensure that
Bahrain’s consumers avoid any further disruption in
the long term and the sector can develop modern
telecommunications services without any constraints
or anti-competitive behaviour caused by restricted
access to numbers.
The TRA conducted a full review of the plan, which
resulted in the publication of an updated National
Numbering Plan on 26 June 2004. This was to clear
the plan from redundant provisions that applied to
the period before June 2004.
15
Ensuring Choice
nsforming
Telecoms’ focus to
Consumer
Protection
Working for the consumer
One of the main incentives for moving to full
liberalisation was to deliver the benefits of a dynamic
world-class telecommunications system to users of
telecommunications services in the Kingdom of
Bahrain. The TRA is committed to promoting the
interests of consumers as it oversees the developing
telecommunications industry. In 2004 the TRA made
significant moves towards establishing an effective
dialogue with consumers and introduced regulation
to improve users’ experience of telecommunications
services in the Kingdom.
First Consumer Advisory Group
A highlight of the year was the establishment of the
first Consumer Advisory Group. This was set up to
advise the TRA on drawing up a code of conduct for
Carrier Pre-Selection and other consumer related
CPS issues. The members of the Group, announced
on 7 August, were nominated by their institutions
and comprised:
Mr Yousuf Al Mahdi
–
(Chairman of the Group)
The TRA would like to thank the members of the
group for the time and effort they devoted to this
issue. The Group met for the first time on 18
September and by the end of the year they had
already met seven times. They attended presentations
by the TRA and operators, and considered codes of
practice currently used elsewhere.
By the end of the year, the Group was close to putting
forward its final recommendations for the code. The
minutes of all the Group’s meetings were posted on
the TRA’s website and their final recommendations
will also be published on the site. A section of the
website contains comprehensive information about
the Group and its activities.
This is in line with the TRA’s policy of openness and
transparency in all its activities, and the TRA will set
up similar groups in the future to meet the need for
closer involvement of the industry and consumers.
Consumer Protection Directorate,
Ministry of Commerce
Mr Abdul Nabi Kalawadh
–
Bahrain Chamber of Commerce and Industry
Dr Wafa Al Mansoori
–
Consumer Protection Society
Ms Sabah Al Moayyad
–
Supreme Council for Women
–
Supreme Council for Women
–
University of Bahrain
(from 7/8/2004 to 24/11/2004)
Ms Najma Janahi
(from 24/11/2004)
Dr Fawzi Al Balooshi
Figure 3: Members of the first Consumer Advisory Group
Annual Report 2004
17
Mobile Phone Jammers
mobile phone jammer in a specified location to seek
Mobile phone jammers are devices that block the
prior approval from the Authority. In exceptional
signal to or from a mobile phone. When the jammer
cases only, the TRA will approve the use of jammers
is activated, the mobile phone user can neither send
after consulting with the Directorate of Wireless
nor receive phone calls or messages. These devices
Licensing and Frequency Management at the
are usually found in places such as cinemas,
Ministry of Transportation. The TRA will consider
conference halls and hospitals, where people using
each application on a case-by-case basis.
mobile phones can cause a disturbance.
The regulation allowed for a grace period of one
Following concerns from the public about the use of
month so that any devices in use could be removed.
jammers in certain public places, the TRA issued a
Once the month was over, in December, anybody
public consultation in March 2004 – as is the practice
using a jammer from then on without the formal prior
for all regulatory steps taken by the TRA. The draft
approval of the TRA would be in breach of the
regulation was issued in August 2004, and it
regulation and thereby the Telecommunications Law.
reflected the comments received to ensure a
fair, workable solution that is in line with best
In the regulation, the TRA concluded that misuse of
practice internationally.
mobile phones by a few people did not justify the
operation of mobile phone jammers, which could
18
On 8 November, the TRA issued a regulation
have various legal and safety implications, for
prohibiting the use of jammers, in line with other
example if a mobile phone user could not reach the
jurisdictions, and requiring anyone wishing to use a
emergency services due to the use of a jammer.
Annual Report 2004
However, by way of a publicity campaign, the TRA
Access to information
urged people to be more considerate of others when
An important aspect of openness in a liberalised
using their mobile phones.
telecommunications industry is that consumers have
access to as much information as possible. In 2004
‘Use Your Mobile Wisely’ – TRA’s first
consumer campaign
the TRA made two significant steps forward in
On 26 December, following the Mobile Phone
can make better-informed choices and find out about
Jammers Regulation, the TRA launched its first public
all the latest developments in the sector. It is also
awareness campaign, ‘Use your mobile wisely’. The
important that they are able to take part in
campaign aimed to remind people to stop and think
consultations and air their views. With this in mind,
of others when using their mobile phone in public
from the early days the TRA sought to make its
places, such as theatres, conferences, mosques,
information as widely available as possible, whilst
libraries, classrooms, hospitals, and so on – all places
at the same time providing as much information as
where people might reasonably expect not to be
it could within the limits permitted by law. To this
disturbed by a ring tone or phone conversation.
end, all our documents and actions were
improving access to information, so that consumers
accompanied by press releases and covered by the
‘Use your mobile wisely’ was a multimedia campaign
local and regional media, thus making all Bahrainis
featuring ‘Mr Mobile Menace’. It was launched in
aware of what the TRA was doing.
December with:
The website
two short videos for TV and cinema, showing
Good access to information is an important aspect
inappropriate use of mobile phones
of openness and transparency. The website offers
•
press advertising in newspapers and magazines
widespread easy access to information, not only for
•
radio inserts, and
consumers but also for licensees, potential licensees,
•
posters in places with public access.
other market entrants and people interested in
•
Bahrain’s telecommunications market. As a matter
The campaign was well supported by a number of
of routine, the TRA posts on its website all
organisations in the Kingdom. Among these were
publications, consultations, key announcements and
the Radio & Television Corporation, Dana Cinemas
decisions, licensing information, background papers
and the Bahrain Cinema Company, which all agreed
and so on. This information is presented in both
to broadcast the video clips free of charge. This
English and Arabic.
enabled the campaign to reach a wider audience
and so gather momentum and be more effective in
As mentioned above, all new developments and
getting its message across. The TRA would like to
significant events are marked by a press release and
thank all organisations supporting its campaign for
can also be found on the site. The news section
their efforts in this matter.
effectively forms a diary of highlights in the Kingdom’s
telecommunications year, and allows visitors to drill
The December launch elements were the first phase
down if they wish to obtain more detailed information
of the campaign. Further phases will target particular
about a particular item. All information and
groups of people within the community and use
publications on the site can be easily downloaded
different methods to reinforce the message. The
and printed.
strategy is to continue running the campaign over a
long period of time in order to promote a caring,
From the outset, the TRA has published all its
considerate culture among users of mobile phones.
consultations and other activities on its website.
Annual Report 2004
19
This is fundamental to the TRA’s policy of openness
Braille and large print
and transparency. The website is therefore a vital
The second step forward was the announcement on
communication channel through which the TRA
25 September that all the TRA’s publications would
reaches consumers.
be available upon request in Braille format for blind
people and large print format for those who find
In March 2004 the TRA launched its revamped
normal size print difficult to read. The range of
website (www.tra.org.bh). All the information on the
publications includes consultations and reports. The
site is in both Arabic and English. Visitors make a
University of Bahrain has already started to stock
simple one-click choice of language on entry. The
the TRA material in Braille in their Library for the use
new design and navigation system have been set up
of students with special needs, and the TRA
with users in mind so they can find the information
welcomes the move.
they want far more quickly and easily. The system
20
for downloading documents from the site, in Arabic
In the near future, the TRA will be publishing
or English, has also been greatly improved. Initial
consumer guides and information on developments
feedback on the new site has been very favourable,
that affect all users of telephony. This makes equal
but the TRA is always open to receiving feedback
access for visually impaired people particularly
and suggestions as to how to improve the site.
important. The move is supported by the Bahraini
Annual Report 2004
Saudi Institute for the Blind. Publications in these
the review, the TRA found that the systems and
two formats are sent out on request and are free of
processes in place were satisfactory at the time.
charge. The TRA would like to thank the Bahraini
Batelco’s tariffs for telecommunications must be
Saudi Institute for the Blind for their support, and
approved by the TRA, as this is a requirement for all
hopes that this move will assist all members of our
licensees in a dominant position. During 2004, the
society to better enjoy the benefits of telecoms
TRA received 52 tariff applications from Batelco. Of
liberalisation in the Kingdom.
these, the TRA approved 35, while 6 were rejected.
The remaining 11 applications were still under review
Billing and tariffs
at the end of the year.
As part of the ongoing licence compliance verification
for operators, the TRA undertook a review of MTC-
Consumer complaints
Vodafone Bahrain’s billing systems, in order to verify
During 2004 the TRA received a total of 22 complaints
that the billing system and the process that has been
about telecommunications operators. The complaints
devised by MTC-Vodafone Bahrain is sufficient to
focused on various issues, including delays in service
ensure sound management of the billing runs, as
and billing inaccuracies. Of the complaints received,
well as billing accuracy, before the final bills are
16 cases were closed by the end of the year and a
printed and delivered to subscribers. After completing
further six were still being resolved.
Annual Report 2004
21
Weaving Regulatory
Transparency
nsforming
Regulatory
Accountability
Openness and transparency
From the moment it was set up, the TRA has
endeavoured to conduct all its affairs in an open and
transparent manner. One important way in which it
does this is by consulting widely, in a series of stages,
before taking any important decisions on regulatory
matters. The TRA is fully committed to TRAnsparency
and its success in this has been recognised by
international commentators.
• Access to the local loop and related facilities
and services
All but the last two were concluded by way of final
regulations during the year. Details of these issues
are discussed elsewhere in this report. A full list of
consultations is given in Annex B.
The TRA Development Review Panel
Consultations
Before a final regulation is issued, the TRA publishes
one or more consultation documents in the form of
draft regulations/guidelines or papers setting out the
options. At every consultation stage, the TRA considers
carefully all views submitted to it, and uses these to
shape the next document for further consultation, or
the final document, be it a regulation, a determination
or an order. Furthermore, the TRA always issues
reports analysing the comments received on a
particular consultation, setting out its own position
and providing relevant background information. All
these documents are posted on the website. Hard
copies are also available and are routinely sent to key
people in the telecommunications industry, as well as
relevant Government officials and other organisations.
During 2004 the following issues were the subject
of consultations:
•
•
•
•
•
Carrier Pre-Selection
The use of mobile phone jammers
Accounting separation
Mergers and acquisitions policy
Dominance in certain markets
Annual Report 2004
At the end of the year, plans were well advanced for
the TRA to take another major step forward in its
commitment to openness and transparency. It had
invited a distinguished panel of independent
international experts to investigate and review the
TRA’s processes and activities to date – and to make
its views and recommendations public.
The TRA Development Review Panel will hear evidence
and views from different perspectives in the market,
including operators and prospective operators. It will
then recommend improvements drawing on the
considerable experience of its members in different
global markets. The members of the Panel will be:
• Professor Martin Cave, Director of the Centre for
Management Under Regulation, University of
Warwick Business School, UK (Chairman)
• Ian Martin, Senior Telecommunications Analyst
at ABN AMRO, Australia
• Christopher Wright, Special Advisor on Regulated
Industries, Slaughter and May (Solicitors), UK
This is a groundbreaking move in opening up the
regulatory system to expert scrutiny.
23
International Links
In global telecommunications terms, the Kingdom of
Bahrain is a relatively small market, although of
considerable strategic significance as the most open
and liberalised jurisdiction in the Middle East. It was
therefore important to proactively promote Bahrain’s
regulatory regime in the international arena. There
were two main objectives: first, to highlight the new
regulatory environment; and second, to ensure that
the sector in Bahrain learns from experiences in
other more mature markets and is kept abreast of
the latest developments in telecommunications
worldwide.
Following the landmark move to full liberalisation on
1 July, the TRA announced this achievement in the
international press, focussing on leading financial
publications. The announcements appeared in many
different countries – including (in alphabetical order)
China, Egypt, France, Germany, India, Japan,
Lebanon, Singapore, UAE, UK and USA - and in
many different languages. The aim of these
i n t e r n a t i o n a l a n n o u n c e m e n t s w a s t o c re a t e
awareness of this important milestone in Bahrain’s
telecommunications history.
In 2004 the TRA made significant progress in forging
i n t e r n a t i o n a l l i n k s a n d p ro m o t i n g t h e n e w l y
established Bahraini regulatory environment overseas
in different ways. Representatives from the TRA
spoke at international conferences around the world
– in Dubai, Beirut, Singapore, London and Qatar. In
July 2004, with the Economic Development Board
of the Kingdom, the TRA co-sponsored the Bahrain
Business Opportunities Seminar in Hong Kong.
24
Annual Report 2004
On a bilateral basis, the TRA established strong ties
with regulators in two other countries – Jordan and
Greece. The TRA signed separate Memoranda of
Understanding (MoU) with the Telecommunications
Regulatory Commission (TRC) in Jordan and the
National Telecommunications and Posts Commission
(EETT) in Greece. These laid the foundations for
future co-operation between the TRA and their
counterparts in those countries on issues of mutual
interest. The MoUs also open a direct channel for
exchanging information, experience and expertise
on regulatory matters.
A delegation from the TRA also attended the annual
meeting of the Arab Regulators Network (ARN) held
on 21-25 March 2004 in Jordan. The ARN is an
organisation which forges links between all Arab
regulators in the region.
The TRA Development Review Panel (see Openness
and Transparency) was another way in which strong
links were developed with international experts in
regulation and telecommunications during the year.
All these activities have helped build up the global
profile of the telecommunications regulatory
environment in Bahrain.
Annual Report 2004
25
Creating the
Regulatory Fabric
nsforming
to the needs
of the Market
Regulatory update
There were a number of other regulatory issues that
arose during the year, which have not been covered
elsewhere in this report. This section summarises
some of the TRA’s other activities in 2004.
US Free Trade Agreement
During 2004, the Kingdom of Bahrain
negotiated the terms of the Free Trade Agreement
with the USA. The TRA was a member of the telecoms
team responsible for the Telecommunications chapter
of the agreement. The Authority provided input
t o t h e t e a m re g a rd i n g t h e t e l e c o m s - re l a t e d
c o n d i t i o n s o f t h e a g re e m e n t , i n a d d i t i o n t o
ensuring that the terms were in line with the
Telecommunications Law of the Kingdom.
The Telecommunications chapter of the agreement
was among the first areas to be successfully closed
and agreed upon. This is mainly due to the fact that
the regulatory framework in the Kingdom is largely
based on the US and EU models, which promote fair
competition in an open environment.
Formula One
In April 2004 Bahrain hosted its first Formula
One Grand Prix. This landmark event required
e x t e n s i v e p re p a r a t i o n s t o e n s u re t h a t b o t h
participants and fans enjoyed an experience that
matched their high expectations.
The TRA took the initiative in conjunction with the
Ministry of Transportation of liaising with the
telecoms operators, and Bahrain Radio &TV and
Annual Report 2004
the team managing the circuit to ensure that
t h e t e l e c o m m u n i c a t i o n s re q u i re m e n t s o f t h i s
event were met by all concerned. This involved
conducting several coordination meetings between
the parties to ensure that issues such as additional
capacity requirements and spectrum interference
were dealt with.
These efforts resulted in giving the best of what
Bahrain telecommunications have to offer guests
and visitors from all over the world.
‘Blackout Monday’
On 23 August there was a blackout in the Kingdom
of Bahrain for almost the entire day. This was a
severe test for Bahrain’s telecommunications system.
The TRA monitored the situation closely throughout
the period of the power outage. Both main operators
managed to maintain a good level of service to the
majority of customers during the incident. Because
of the long duration of the outage some areas did
lose service.
There were, however, lessons to be learnt, and the
TRA undertook to work with both main operators in
addressing weaknesses and improving the resilience
of their networks. The main operators’ contingency
plans must be sufficiently robust to withstand different
types of incident, as telecommunications services
are so critical during emergencies and in reestablishing personal contact and business continuity
after any such event.
27
Internet issues
During 2004 the TRA was approached by “Connexion
by Boeing” about the licensing position if they offered
high-speed internet services to aircraft passengers flying
over the Kingdom of Bahrain. After due consideration
and analysis of the situation, the TRA concluded that
Boeing did not require a licence to operate this service.
The TRA had to consider a novel situation that was
simultaneously being examined by a number of other
regulators around the world and included a series of
complex issues of law and technology. This was an
example of the areas where the regulator is challenged
to meet the demands of the industry and consumers as
new technologies develop.
In April the TRA published a position paper clarifying
the regulatory position on the carriage of voice
traffic using the Internet Protocol (IP). In effect, this
is a means of making telephone calls over a data
network instead of the normal public switched
telephone network (PSTN). The principal advantage
is the low cost, but possibly with less quality than
the usual IDD.
28
The paper explained that operators licensed to carry
voice traffic over national and international networks
and links are free to use the most appropriate
technology for the purpose. However, operators
holding other licences, which do not permit public
voice services to be offered (including ISP or VAS
licences), are not permitted to carry such voice calls.
Private wireless connections and networks
(WiFi)
At the end of the year, the TRA began formulating its
policy on wireless LAN (Local Area Network) systems
and products as a public telecommunications service
using, in particular, WiFi (Wireless Fidelity) technology.
The TRA is considering what is needed to facilitate
new means of Broadband connectivity, as the need
of “anywhere anytime” connectivity in the Kingdom
for end users is becoming crucial.
This policy is expected to be finalized during 2005.
Annual Report 2004
Consultation Documents
Annual Report 2004
29
Sailing Ahead
with Changing Times
nsforming
the TRA
Inside the TRA
While 2004 saw the historic final step towards an
total complement of staff is currently below the
open telecommunications market in the Kingdom of
forecast of 21 by the end of 2004, but the priority has
Bahrain, it also saw some major changes within the
been to recruit staff with the right skills and experience.
TRA itself. Some of these reflected the increase of
activity in the sector following full liberalisation, while
The focus for recruitment remains on selecting
others reflected the changing shape of the market
candidates from Bahrain's highly skilled local
as it moved towards open competition.
workforce. Recruitment will continue in 2005, with
some key new posts to be filled. The effectiveness
The Board of Directors of the TRA, to whom the
and reputation of the TRA depends entirely on the
General Director and the TRA are accountable, saw
calibre and dedication of its staff, so great importance
in May the appointment of Shaikh Hamad bin Abdulla
is placed on human resources (HR) issues.
Al Khalifa, pursuant to Royal Decree 27 of 2004, as
the new member of the Board following the
The TRA continued to expand training programmes
resignation in January of Mr Rasheed Al Meraj.
for its staff and encourage their professional
development. During the year, nearly 50 per cent of
Also in January, the TRA moved to its new offices
the TRA staff attended external training courses. The
located in the Taib Tower, Manama. This enabled the
TRA continued to offer staff other opportunities to
TRA to recruit more permanent staff, who were urgently
diversify and expand their knowledge and skills base.
needed. By the end of the year, ten had joined the
organisation bringing the total number of staff up to
In 2004 a new automated HR system was installed
17 – from a starting point of just seven in 2003. The
which will enable job objectives to be linked with
performance record and further training requirements
for each member of staff. Since the TRA was set up
in 2002, it has sought to recognise individual
contributions from staff through a performancerelated assessment, and 2004 was the first year that
individual assessment was implemented for all
members of staff. This will be further developed to
ensure that it meets the needs of the TRA, its staff
and, more importantly, the needs of the consumers
and the market as a whole.
Annual Report 2004
31
With a changing industry and changing priorities,
One move that illustrates the point was the separation
the TRA also needed to introduce certain changes
of the Licensing Department from the Market
to its organisational structure. Some of these changes
Operations Unit. This enabled the former to focus
were designed to improve efficiency as well as
on processing licence applications more efficiently,
recognise areas of significant growth in workload
leading to a reduction in the length of the process.
within a developing competitive market. Obviously,
When promotion of competition is a top priority,
as a new organisation that functions in a fast-
unnecessary delays in assessing and issuing licences
developing industry, the TRA will need to see further
must be avoided.
changes in order to maintain its flexibility and its
ability to act fast and effectively.
32
Annual Report 2004
Statement of
Accounts
Annual Report 2004
33
BALANCE SHEET
as at 31 December 2004
ASSETS
2004
2003
BD
BD
111,696
94,135
348,500
-
300
3,030
Non-current asset
Furniture and equipment
Current assets
License fees receivable
Prepayments
Accrued interest
14,743
-
1,546,568
1,197,809
1,910,111
1,200,839
2,021,807
1,294,974
40,555
158,976
Amounts payable
909,897
522,953
Accrued expenses
678,355
585,045
Advance received for future expenditure
393,000
28,000
1,981,252
1,135,998
2,021,807
1,294,974
Bank balances and cash
TOTAL ASSETS
ACCUMULATED SURPLUS AND LIABILITIES
Accumulated surplus
Current Liabilities
TOTAL ACCUMULATED SURPLUS AND LIABILITIES
The financial statements of Telecommunications Regulatory Authority were authorised for issue in accordance with
a resolution of the Directors on 20 March 2005
Dr Mohammed J K Alghatam
Chairman of the Board of Directors
34
Mr A Andreas Avgousti
General Director
Annual Report 2004
INCOME STATEMENT
from
INCOME
Year ended
23 October 2002
31 December
to 31 December
2004
2003
BD
BD
Contribution from Ministry of Finance
License fees
2,400,000
1,741,638
288,995
14,743
-
1,756,381
2,688,995
Consultancy fees
622,259
1,955,327
Publicity and promotions
251,007
196,180
General and administration
873,298
181,195
Board of Directors remuneration and expenses
98,625
196,017
Depreciation
29,613
1,300
1,874,802
2,530,019
(118,421)
158,976
Interest income
EXPENSES
(DEFICIT) SURPLUS FOR THE YEAR/PERIOD
Annual Report 2004
35
Annex B
Consultations
Consultation
Date of Issue
The Possible Use of GSM Jammers in the Kingdom of Bahrain
20 March 2004
Dominance in certain markets and the provision of Access services
26 May 2004
Local Loop and related facilities and services
1 June 2004
Telecommunications Mergers and Acquisitions Regulation
20 June 2004
Annual Report 2004
37
Annex C
Regulations & Determinations
38
Regulation
Date of Issue
Carrier Pre-Selection Regulation
14 June 2004
Accounting Separation Regulation
2 August 2004
Telecommunications Mergers & Acquisitions Regulation
28 September 2004
Mobile Phone Jammers Regulation
8 November 2004
Annual Report 2004
Annex D
Orders
Order
Date of Issue
Interim Interconnection Order No. 3
15 March 2004
Interim Interconnection Order No. 4
15 June 2004
Annual Report 2004
39