Batelco Bahrain Refutes Accusations by TRA

Batelco considers unjustified and misinformed recent action and statements by the TRA claiming that Batelco is hindering access of Other Licensed Operators (OLOs) to international cables and working against the interests of the national economy.

Batelco’s Chairman, Sh Hamad bin Abdulla Al Khalifa expressed serious disappointment of the TRA’s draft order served on Batelco on 15 September 2009 and the related press releases. Batelco denies the allegations made in the Draft Order and in the press. Batelco maintains that it has at all times complied with its obligations under the law for the provision of access services to the FLAG and other international cables on terms and at cost oriented prices already approved by the TRA.

Batelco also maintains that the TRA is now seeking to use an enforcement order to compel Batelco to unfairly provide a new form of access specific to this international cable for other licensed operators.

“The facts are that the TRA in 2004 approved a contract between Flag and Batelco for the introduction of this international cable, mandating changes to the contract before its approval. The TRA also introduced regulations for Batelco to provide access to other licensed operators for such cable“stated Batelco’s Chairman.

“Batelco took the decision to enter into the TRA approved contract and invest US$ 50 million to bring this international cable to Bahrain for the benefit of the Kingdom and its citizens. Notwithstanding the 15 year contract that the TRA approved in 2004 and the significant investment that Batelco undertook, now the TRA is seeking to arbitrarily change a commercial contract and mandate new arrangements in an unjustified manner” continued Sh Hamad.

“What is even more disturbing is that not only the TRA has arbitrarily changed its mind on a commercial contract it previously approved but it has also introduced a significant fine against Batelco regarding this matter. The TRA has changed its mind after we made a significant investment to improve the Kingdom’s infrastructure and instead of compensating Batelco for changing a commercial contract, is now penalizing us” stated Sh Hamad.

“We believe the TRA has failed in its duty to protect all companies in the industry and to encourage companies to invest for the long term. The TRA has also failed in its duty to mediate a dispute. Such action by the TRA is high handed, unreasonable and totally unprecedented in Bahrain” continued Sh Hamad.

“We can’t understand why the TRA, within 5 years from approving the contract, is now fining Batelco for acting consistently with the terms and conditions of this contract. The TRA approved the contract and Batelco is fully complying with it. It is very hard to act in a professional manner as a telecommunications operator in the Kingdom if the regulator can suddenly mandate other types of access just because it suits him to do so. The irony is that the TRA is seeking to fine Batelco for not providing other licensed operators access to third party equipment which Batelco has no right to grant.” said Batelco Bahrain, CEO, Mr. Rieder.

“Batelco is currently in negotiations with two consortiums to bring two new international cable systems into Bahrain. TRA’s draft order and about change of approved commercial terms disincentivises Batelco to go ahead with its investments in more international cables which are essential for Bahrain’s competitiveness in the region. This behaviour by TRA is contrary to Bahrain’s 2030 vision and creates concerns for long term telecommunications infrastructure investments in the Kingdom” mentioned Sh Hamad.

“We have published our wholehearted support for the Kingdom of Bahrain’s economic vision for 2030 and believe we are pulling our weight via our ongoing investments in the development and implementation of relevant technologies and 21st century network infrastructure to meet the directives of HM King Hamad bin Isa Al Khalifa.”

“Going to the press and stating that Batelco shall be fined, means that TRA has jumped to a prejudged and predetermined outcome. Also, referring to the specific range of the fine removes the ability of the TRA to impartially decide a more reasonable course of action” explained Sh Hamad and added “The TRA is under a duty to act in a fair and transparent manner and not to show favour to any party”.

“Allegations that we are denying our competitors access to international cables are baseless. As the TRA is fully aware we have been in meaningful discussions with OLO’s over a number of months to reach an appropriate commercial agreement with OLO’s to provide the access service without compromising national security and the Kingdom’s connectivity to the rest of the world. The TRA should encourage and facilitate operators to reach commercial solutions to any issues between them particularly issues involving the protection of the Kingdom’s national security . Unfortunately, we have a regulator that is not so minded and prefers to use outdated draconian regulatory measures and the press instead” said Sh Hamad.

“We must stress that we never had an exclusive deal with FLAG and access to international capacity through this cable and other cables have always been available for other licensed operators. Based on prices set by the TRA, OLO’s can now purchase this capacity from us on wholesale terms,” added Mr. Gert Rieder.

“We repeat what we stated previously that OLO’s have had the capability to enter into an agreement with Reliance (FLAG cable owner) to provide international capacity. If they do enter into such an agreement, Batelco must then deliver a connection to them (the OLO) to connect directly with the cable,” Mr. Gert Rieder elaborated.

In further expanding on the scope of the article, Mr. Gert Rieder said “that no telecom company in Bahrain had come close to matching Batelco by way of investment in infrastructure to deliver world class telecommunications solutions. Although some operators have invested in their own infrastructure, none has invested in connecting Bahrain to the rest of the world except Batelco.”

Batelco is also one of the largest contributors to Bahrain’s economy and in 2008 invested BD173.3 million in the local economy with BD40.9 million committed for new and enhanced infrastructure. BD4 million was committed to sponsorships and donations to support health, education, sports and cultural activities in the community.

“Such inaccuracies as are included in the TRA’s press article are misleading for the public and are counter-productive in achieving our mutual goal; the best possible service provision for the residents of the Kingdom,” said Sh Hamad.

“It is regrettable that Batelco, the Kingdom’s leading Bahraini telecoms company, that has elevated the Kingdom to be on a par with much larger, more advanced nations, is the target of a barrage of false accusations which only serves to mislead Bahrain’s residents. Batelco has, since inception, played a significant role in the economic growth and development of Bahrain. The company has injected hundreds of millions of dollars into the local economy and is fully committed to the ongoing delivery of better value services for its customers through the introduction of the latest technologies and new and enhanced infrastructure, and to the support of community and humanitarian initiatives” concluded Batelco’s Chairman.

 

September 16,2009