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Master title
Bahrain
converged
style
update
Click to2011
edit Master subtitle style
July
Ismail Patel
Research Analyst, GCC
11/09/2009
Bahrain converged update, July 2012
• Highlights
• Socioeconomic conditions
• Telecoms-market context
• Services
• Networks
• Smartphones, data and messaging, and content and apps
• Informa forecasts
www.informatandm.com
© Informa UK Limited 2012. All rights reserved
3
Highlights
• The Government has announced the third National Telecommunications Plan, stating that
a fiber NBN and 4G LTE should be deployed in the next three years.
• All three mobile operators have trialed and showcased 4G LTE. Licenses are expected to
be issued in 1H13. Operators have launched HSPA+.
• Promotional offers in voice, SMS and data dominate the market, especially in the prepaid
segment. In postpaid, Viva launched a high-end platinum postpaid plan.
• The fixed-broadband market is saturated with little room for growth. Alternative operators
consider LLU off Batelco’s network to be too expensive and only Lightspeed has partially
unbundled the incumbent’s network.
• Batelco scrapped plans to sell its Bahraini and Jordanian towers, looking instead to share
with rival operators, stating that initial proposal lacked economic sense.
Socioeconomic conditions
Statistics
4Q11
Population
1,341,510
Population growth rate (%)
2.77
Median age
30
Urban population (%)
Rural population (%)
75
25
Rate of urbanization (%)
1.8
Households
Country area (sq km)
GDP (US$ bil.)
GDP per capita (US$)
Annual GDP growth (%)
123,730
765
31.38
37,941
5.44
Notes: GDP statistics are based on purchasing-power parity
Sources: Informa Telecoms & Media, IMF, World Bank
5
Telecoms-market context
•
Regulation
•
Telecoms-market overview
•
Telecoms-market financials
6
Regulation
Topics
Current status
Regulatory body
Telecommunications Regulatory Authority (TRA) possesses autonomy
from the government, and is involved in all major telecoms and digitaleconomy decisions.
Fixed-line
infrastructure
Owned and operated by Batelco; LLU is legislated but only a few
cabinets have been unbundled by Lightspeed. National broadband
network is approved and set to be deployed during the next three
years.
Spectrum
4G licenses to be issued in 1H13. Also, a license award process for
paired spectrum for 3G+ in the 2.6GHz, and in other frequency bands
used for mobile telecoms later, will occur later this year or in early2013 in two sets: two paired sub-bands of 40MHz, which would be
freed by end-2012; and an additional 30MHz of paired 2.6GHz
spectrum, freed by end-2014
Number portability
Has been in service since 3Q11. In 1Q12, the TRA stopped Viva
charging BHD1,500 (US$3,978) for MSNS (Mobile Special Number
Service) customer cancellations as Viva did not get prior approval for
the charge. The TRA said that this charge could potentially impede
the uptake of mobile number portability (MNP).
7
Telecoms-market overview
Statistics
Telecoms connections (mil.)
• Total mobile
• Total fixed
Penetration rate (%)
• Mobile
• Fixed
1Q11
4Q11
1Q12
1.60
0.23
1.69
0.24
1.72
0.24
122.16
185.89
126.25
193.97
127.36
193.97
Leading mobile operator
Batelco
Batelco
Batelco
Leading fixed-broadband operator
Batelco
Batelco
Batelco
Internet users (mil.)
n/a
0.69
n/a
Broadband users (mil.)
• Mobile
• Fixed
0.24
0.23
n/a
0.29
n/a
0.30
Smartphone users (mil.)
0.70
0.76
0.78
184.74
201.83
201.44
34.21
30.79
30.51
Total mobile revenues (US$ mil.)
Mobile ARPU (US$)
Source: Informa Telecoms & Media
8
Services
•
Multiplay services and bundling
•
Voice
•
Mobile subscriptions by operator and technology
•
MVNOs
 Market overview
 Profiles
•
Broadband
•
Fixed-broadband
 Market overview
 Providers
•
Mobile broadband subscriptions by operator and technology
•
Multichannel TV
9
Multiplay services and bundling
Provider
Fixed
broadband
Fixed
voice
TV
Mobile
broadband
Mobile
voice
Wi-Fi hot
spots
Batelco
ADSL,
FTTH/B
PSTN,
ISDN
IPTV (over
FTTH/B)
HSPA+
WCDMA
Yes
Mena
Telecom
WiMAX
VoIP
No
No
No
No
Zain
WiMAX
VoIP
No
HSPA+
WCDMA
No
Lightspeed ADSL
No
No
No
No
No
2 Connect
No
No
No
No
No
ADSL
Provider
Maximum FB bundle size (elements)
Optional extras and discounts
Batelco
Triple (fixed broadband, fixed voice,
TV)
3G+WiFi PS Vita for FBB
customers, paid in instalments
Mena Telecom
Dual (fixed broadband, fixed voice)
n/a
Zain
Dual (fixed broadband, fixed voice)
n/a
Lightspeed
None
n/a
2 Connect
None
n/a
10
Voice
Voice subscriptions by type, 1Q10-1Q12
Subscriptions (mil.)
Fixed
Mobile
2.0
1.5
• Mobile subscriptions reached 1.72 million at
end-1Q12, representing population
penetration of 127.36%, the lowest in the
GCC and Jordan.
• Landlines reached an estimated 241,000 at
the same time, with household penetration
at 194%, the second highest in the region
after Qatar.
1.0
0.5
0.0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Voice net adds by type, 1Q10-1Q12
Net additions (000s)
Fixed
70
60
50
40
30
20
10
0
-10
-20
Mobile
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
• Growth in fixed is stagnant as the market is
saturated, whereas the number of mobile
subscriptions continues to grow as multiSIM adoption increases due to promotional
offers.
• Whereas there is no suggestion of PSTN
being substituted by mobile, managed VoIP
services (Mena Telecom and Zain) as well
as OTT VoIP services (Skype, etc.) are on
the increase and pose a threat to traditional
landline revenues.
11
Mobile subscriptions by operator and technology
By operator
Subscriptions
2Q11
3Q11
4Q11
1Q12
Batelco
759,900
752,400
739,000
738,000
Viva
403,100
424,600
446,500
454,000
Zain
467,000
485,010
508,000
528,000
2Q11
3Q11
4Q11
1Q12
1,259,550
1,268,390
1,268,150
1,269,660
370,450
393,620
425,500
450,340
By technology
Subscriptions
GSM
WCDMA
12
Mobile ARPU trends by service and operator
Mobile ARPU by operator by service category, 1Q12
• Average ARPU was US$36.41 in 1Q12, an
increase from US$35.79 in the last quarter
and US$35.35 year-on-year.
50
45
44.94
• The country stands in fourth place in the
Middle Eastern region in ARPU.
40
35
37.81
ARPU (US$)
30
27.00
25
20
15
10
5
0
Batelco
Viva
Zain
• Viva has been the strongest performer in
revenues per customer, due to its
concentrated data-focused subscriber
base. Batelco follows with its larger
postpaid base, and its increase of
promotional offers in prepaid in comparison
with its rivals.
• Informa believes the arrest in ARPU
decline can be achieved once commercial
LTE is launched in the country, with
competition between all three operators.
13
Fixed broadband overview
• Inform estimates that over one third of these
subscriptions are SMEs. This has had an
effect on household penetration, which stood
at 244% if UN household figures are taken
into consideration.
• Net growth is expected to drop rapidly as the
market becomes increasingly saturated.
• Faster mobile-broadband technologies are
expected to cause some degree of
substitution from fixed, as most fixed data
packages themselves are capped like
mobile.
350
Subscriptions (000s)
• Subscriptions were estimated to have
breached the 300,000 mark in1Q12.
Fixed-broadband subscriptions, 1Q10-1Q12
300
250
200
150
100
50
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Fixed-broadband net adds, 1Q10-1Q12
35
30
Net adds (000s)
• Due to its microgeography, there is only a
limited scope for fixed-broadband to expand
in Bahrain.
25
20
15
10
5
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
14
Fixed-broadband networks
Fixed-broadband subscriptions by major technologies,
1Q10-1Q12
WiMAX
1Q12
Net adds (000s)
FTTH/B
xDSL
200
Fixed-broadband net adds by technology,
1Q12 and 1Q11-1Q12
160
120
1Q11-1Q12
60
50
40
30
20
10
80
0
FTTH/B
40
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
WiMAX
xDSL
• Batelco’s xDSL network continues to be
the largest fixed-broadband network by
subscribers, with a market share of 61%.
Fixed-broadband market share by technology, 1Q11 and 1Q12
1Q12
1Q11
FTTH/B
0.9%
FTTH/B
1.2%
WiMAX
37.7%
WiMAX
40.1%
xDSL
59.0%
xDSL
61.1%
• Mena Telecom and Zain’s WiMAX
networks are growing steadily, targeting
the low-end residential market, with a
37.7% market share.
• Nuetel first launched FTTH/B in Amwaj
Islands. Batelco started to roll out fiber in
greenfield areas. The proposed NBN will
boost the FTTx market share in Bahrain.
15
Fixed-broadband providers
• Mena Telecom and Lightspeed have been
growing strongly.
• All operators, other than Batelco and the two
WiMAX operators, focus on the SME market.
• Most service plans are capped. Batelco recently
upgraded its 8Mbps/60GB, 10Mbps/80GB and
16Mbps/100GB to 90GB, 120GB and 150GB,
respectively. It also raised its minimum “up-to”
upload speed to 512Kbps.
Top five providers by fixed-broadband
subscriptions, 1Q12
Batelco Bahrain
Mena Telecom
Net adds (000s)
74,000
Zain Bahrain
40,000
Lightspeed
Communications
38,000
2 Connect Bahrain
24,000
Fixed-broadband market share by provider, 1Q12
Fixed-broadband net adds, top five operators, 1Q12 and 1Q11-1Q12
1Q12
85,440
Zain
Bahrain,
13.2%
1Q11-1Q12
2 Connect
Bahrain,
7.9%
25
20
15
10
Batelco,
28.2%
Mena
Telecom,
24.5%
5
0
-5
2 Connect
Bahrain
Batelco
Lightspeed
Mena
Telecom
Zain
Lightspeed,
12.6%
16
Multichannel TV
Multichannel-TV subscriptions by platform, 1Q10-1Q12
Cable TV
DTH
DTT
• Batelco has launched IPTV services in
areas where it has rolled out FTTH. It has
ruled out deploying IPTV over ADSL.
IPTV
200
150
100
50
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Multichannel TV subscriptions by provider, 1Q10-1Q12
ADMC
ART
Batelco
BRTC
Nuetel
OSN
25
20
15
10
5
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
• As yet, it is still in its trial phase and offers
are only made directly to household
residents, not publicly. The company will
roll out the service commercially over the
next 2-3 years, while it looks for a vendor
with access to content.
• DTT is now replacing the analog terrestrial
network. There are an estimated 2,500
households connected to DTT. Analog TV
is expected to be phased out by next year.
• There were an estimated 26,800 pay-DTH
households. Most of these subscribe to
OSN. The number of free DTH households
is estimated at 156,800.
17
Networks
•
Next-generation mobile networks
•
FTTH/B
18
Next-generation mobile networks
Service
provider
Technology
Status (launch status, coverage, investment,
suppliers)
Batelco, Zain,
Viva
LTE
All operators have trialed and showcased 4G LTE
technology in public. Details of licenses and commercial
launches will be announced in 1H13.
Zain Bahrain
Femtocells
Small-cell mobile solutions provider ip.access has
announced that Zain Bahrain will deploy its nano3G
femtocells and picocells. 2G and 3G small cells will be
for public access, private business and residential
users. Small-cell deployments increase network
capacity in urban locations and improve network access
both indoors and in difficult-to-reach locations.
Mena
Telecom
WiMAX 802.16e
Mena Telecom awarded managed services contracts to
Tech Mahindra and Huawei Technologies to upgrade
and manage its nomadic WiMAX network.
19
FTTH/B
FTTH/B subscriptions and net adds, 1Q10-1Q12
Subscriptions
Net additions
4
500
Nuetel
400
3
300
2
200
1,200
Net adds
Subcriptions (000s)
Top FTTH/B providers by subscriptions, 1Q12
Batelco
1
2,400
100
0
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
FTTH/B net adds, top providers, 1Q12 and 1Q11-1Q12
• Nuetel still has a monopoly in the manmade Amwaj Islands in the north.
• Batelco has started to deploy fiber in
greenfield areas, though it has not released
details of its commercial offers public.
• The proposed NBN will increase FTTH/B
take-up in the next five years.
1Q12
1Q11-1Q12
1,000
800
600
400
200
0
Batelco
Nuetel
20
Data and messaging and content and
apps
• Mobile data and messaging
 Key developments
 Revenues
• Operator content and apps
21
Mobile data and messaging: Key developments
Development
Key players
Informa viewpoint
Batelco and Jinny
Software partner on
messaging solutions
Batelco, Jinny
Batelco and Jinny Software, a global supplier of
messaging, call completion and mobile
advertising, formed a partnership in which
Batelco will receive a range of messaging
solutions, including an MMSC, a WAP gateway,
VAS upgrades and an Unstructured
Supplementary Service Data (USSD) gateway.
Viva customers move
to e-billing
Viva Bahrain
Viva has been encouraging its customers to
transfer to e-billing since its launch in 3Q11. As
an incentive, customers who signed up for ebilling before the end of 2011 received a 5%
discount on a month’s bill.
22
Mobile data revenues
Mobile data revenue by operator, 1Q10-1Q12
Batelco
Viva
Zain
Data revenues (US$ mil.)
30
25
20
15
10
5
0
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
• Data is growing exponentially as it eats into traditional voice and SMS revenues.
• Viva is trying to position itself as data-oriented. It overtook Zain Bahrain in data revenues
in 2Q11. Informa estimates that total operator data revenues reached US$50.4 million in
1Q12, up from US$45.7 million in 4Q11 and US3$1.7 million in 1Q11.
• Viva has the advantage of an active parent company, STC, which is rolling out services
that it has tried out in Saudi Arabia to its Bahrain subsidiary.
• The battle for sustaining growth is moving into the lower end of the market.
23
Operator content and apps
Service
provider
Service
Type
Details
Batelco
Samma3ni
Music
Deal with media n/a
group Rotana to
gain rights to
Rotana's music
library. The
“Samma3ni”,
service features
the latest and
most popular
Arabic music
Device
availability
Price
BHD1 (US$2.65)
per month for 25
tracks of choice
for postpaid
customers.
For prepaid, there
is a SimSim
Samm3ni Starter
Pack at BHD3,
featuring 50
minutes of free
local calls on
Batelco network,
BHD1 credit and
25 free music
tracks.
24
Informa forecasts
25
Fixed-broadband forecasts
Fixed-broadband market share by technology, 2012 and 2017
Broadband subscriptions, 2012-2017
2012
600
2017
FTTH/B,
1.8%
500
FTTH/B,
18.2%
400
WiMAX,
35.4%
300
200
xDSL,
62.8%
100
xDSL,
53.8%
WiMAX,
28.0%
0
2012
2013
2014
2015
2016
2017
Fixed-broadband subscriptions by technology, 2012-2017
FTTH/B
WiMAX
xDSL
350
300
• The fixed-broadband subscriptions base is
expected to reach 511,000 by end-2017. The
main factor contributing to this increase will
be the government-backed FTTx NBN.
250
200
• xDSL will be gradually phased out as fiber
becomes more prevalent.
150
100
50
0
2012
2013
2014
2015
2016
2017
• When LTE launches next year, it will put
intense pressure on the WiMAX network in
terms of speeds and value for money.
26
Mobile forecasts by technology and operator
Mobile subscriptions by technology share, 2012-2017
• 3G+ technologies will continue to grow in
the medium term, replacing 2G.
GSM
WCDMA
LTE
100
• Batelco is expected to maintain its
dominant status. Viva will equal Zain in
overall subscriptions in the long term as it
seeks to attract a wide array of subscribers,
from low-end, high-end and data-hungry
residents.
• Based on the UN’s understated population
estimates for Bahrain, mobile penetration of
the population by end-2017 will be 285%.
60
40
20
0
2012
2013
2014
2015
2016
2017
Mobile subscriptions by operator, 2012-2017
Batelco
Viva
Zain
1.2
Subscriptions (mil.)
• LTE will start to have an impact from 2015.
Bahrain has the advantage of being where
the likes of Zain Group and STC first test
their future technology. Because of this, 4G
developments are expected to materialize
rapidly in this market .
Share (%)
80
1.0
0.8
0.6
0.4
0.2
0.0
2012
2013
2014
2015
2016
2017
27
Click to edit Master title
style
Ismail
Click toPatel
edit Master subtitle style
Research Analyst, Informa Telecoms & Media
E-mail: [email protected]
11/09/2009

Make better business decisions

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