Batelco’s profit falls 20% on tough competition and STel start-up costs

22 Jul 2010

Bahrain Telecom Company’s (Batelco’s) net income in the three months ended 30 June 2010 fell by 20% year-on-year to BHD22.3 million (USD59 million), mainly as a result of increased competition in its domestic market and expenses associated with its Indian start-up. Bloomberg reports that the full-service telco’s consolidated revenues dropped by 2.4% y-o-y in the second quarter to BHD84.8 million, although the group’s total number of fixed, mobile and internet customers reached 7.3 million by end-June, including mobile subscribers that increased by 47% year-on-year to 6.88 million and a broadband user base that grew 54% to 230,600. Company chairman Shaikh Hamad Bin Abdulla Al Khalifa added, ‘Gross revenues did not grow in the first half predominantly due to the entry of the third mobile operator in the Bahrain market [Viva, owned by Saudi Telecom Company] … Reduced market share for mobile and broadband services and strong price erosion adversely affected our revenues and profits.’ Batelco also revealed that net profit was affected by outlays needed to get its Indian cellular unit STel off the ground. STel had signed up 1.33 million customers by end-June, across three Indian telecoms ‘circles’, Bihar, Orissa and Uttar Pradesh; having won 3G spectrum for the same three zones in the recent auction, the Indian newcomer says it is in the early stages of planning the introduction of 3G services. The Middle Eastern parent group reiterated that it is keen to acquire additional operators in India, as well as Asia-Pacific countries and North Africa.