Tell me how this is helping innovation in Bahrain?
The slow speed and high cost of broadband Internet here ensures that innovation is dead in Bahrain. Shouldn’t someone pay attention to this? Isn’t knowledge capital the only thing we could have in Bahrain as every other resource is either depleted or just not available? Isn’t the fix more than readily available? Shouldn’t an island as small as ours be encased in free wireless broadband that will strategically encourage innovation?
This is so frustrating.
Update: After that tirade, I called my ISP (MenaTelecom) and they chirplilly told me that I’m out of bandwidth. Their suggestion? I’m on a “very old package” that has been replaced now with a lower price and more bandwidth capacity and newer devices. Yes. It doesn’t seem to be their policy to tell their incumbent clients of this new thing, but only do so when they complain.
I’m paying BD45 for 60GB per month at 10mbps. The new package is BD40 per month for 200GB and higher speed!
According to Starkloff, “Everyone has a bit of a different definition of what 5G is. But it’s the next iteration of cellular standards, with a goal of a 50 times faster data rate than the most advanced Wi-Fi networks today. To give an example, the expectation is that a 5G network can stream a two-hour movie in less than three seconds.”
Last updated 30 July, â€™08 by Mahmood Al-YousifVia @BoilingIce and @ahmedzainal on Twitter.
Batelco’s channel alludes to this too:
@batelco: Our existing customers will be automatically migrated to the new broadband packages with higher speeds & more usage, up to 90% lower prices! […]
E.g.: customers who are currently subscribed to the 2Mbps/BD60 package will be automatically upgraded to 4Mbps at a reduced price of BD50!
In this one, I introduce my initial experience with Zain, my new broadband supplier, I talk about the government’s decision to rescinds its order requiring decent transport to be provided to workers and Filbert makes an appearance!
This is not an April Fool’s gig. This is for real. I’ve just come back from applying for a 2MB WiMax connection from Zain. Paid the required BD 20 for installation and they promise we should be hooked up and ready to go sometime next week.
Now considering that we are within 20 meters of the tower, I do hope that we are not in the dead-zone and that our reception will be good.
I’ve had no experience with WiMax before, and frankly, I waited for too long before making the decision to install it in the hope that Batelco will get better and they will see reason; alas, that doesn’t seem to be a reasonable thing to expect, especially as Batelco has been slapped with a reduced fine of BD100,000 for their efforts to steamroll 2Connect and refusing to give them the lines they applied for. Good for you 2Connect! I hope that other operators sock it to them too. About time they open their gates wide open and let cooperatition in.
Now, I don’t know what your views on WiMax are, but I know that one friend living in the outskirts of Manama has been suffering for some days now with a very flaky [email protected] connection, and despite her repeated attempts to get it fixed, it is still down. All that Zain tech support is telling her is to switch-off/disconnect/connect/switch-on flow-chart thing and the connection is still down.
She noticed that condition apparently at a time when the auzzies had a temper tantrum and riddiculed the whole WiMax thing:
Operators and vendors in the Middle East say they are still have confidence in the technology, despite comments from an Australian operator that the technology has â€˜failed miserablyâ€™
While both Motorola and Zain’s big-wigs were assuring their customers that WiMax is the best there is!
Regional telecoms giant Zain made their WiMAX service available in Bahrain in November 2007. Antoine Abou Khalil of Zain Corporate Communications shared similar feelings to Kirkady, saying: â€œItâ€™s strange that heâ€™s issuing these complaints about the technology as a whole. The technology today is better than it was 12 months ago. The new tech doesnâ€™t have these problems.â€ [source]
Who’s to be believed? And is this whole thing yet another April Fool’s joke?
Finally, there is some movement as far as the internet connectivity is concerned. Lightspeed Communications, which is partly owned by Jordan Telecom, has announced unlimited ADSL packages for the home and office at cheaper rates than the current bandwidth-limited packages offered by Batelco; details of these packages are:
If you go to their site’s tarriff page you will see a bright orange star next to the “promotional rate” but the page does not explain what that star is. It is fair to assume that it indicates some terms and conditions attached to that offer, but in the absence of printed explanations we have to wait for an official response, but unfortunately no response was forthcoming.
Hot on the heals of Lightspeed though, Lightspeed’s supplier have started offering Unlimited access to their business packages with an appreciable discount too! I would not be surprised to find that Batelco will soon introduced either more reductions of tariffs for home users and/or new unlimited packages and that, my friends, will be very welcome.
Is Batelco feeling the competitive heat? There are now many competitors in the broadband business: MTC Vodafone, Lightspeed, Neutel, Kalam, MENA Telecom and 2Connect amongst others, so Batelco most definitely is feeling the heat and Batelco being Batelco is responding of course. They do take competition very seriously and if history serves right, they will only move to provide better, faster and cheaper services when they have to.
They have now, I believe that the charges they levy on broadband access (both residential and business) are still high and I am absolutely convinced that ultimately they will be forced to reduce their tariffs to be more compatible with world standards, and more importantly, be reasonable enough for the local market to engender good internet based innovations.
The numbers that the competitors are offering though do not seem very convincing, especially when you consider they essentially buy wholesale from Batelco and then resell it without having to invest in their own infrastructure but depend on that provided by both Batelco and BIX. This is legitimate business practice of course and done in true trader mentality. But the thing that I fear is that just like a lot of small traders, they over promise and under deliver.
Consider for instance the packages recently announced by Lightspeed (shown above); their capacity is based on a 1Gbps port purchased from Batelco (bitstream service a lot of Lightspeed’s services would run on) which they hope to generate enough interest to fill. At the moment their contention ratio on that pipe is promised to be something like 15:1, but insiders tell me that in order for them to make any money off this deal, their business model is based on providing a contention ratio of 30-40:1. This essentially means that if you buy a 2Mbps contract from them, when they reach their break-even point you will probably experience much lower speeds! By that time of course Batelco might well have released much more competitive packages, or other entrants would have come into the market with good financial strength to carry their plans through while you are locked into that “star” that we can’t seem to find the explanation of.
The financial strengths of both Lightspeed and Kalam specifically give rise to some concerns. My sources indicate that both companies have not paid their BIX bill for months now and are under threat of stop-service. Lightspeed also had to downgrade its bandwidth capacity with BIX because it simply cannot afford the bill and this happened after it has been taken over by Jordan Telecom!
Lightspeed might have a bigger problem on its hands in a few months if it does not meet the “minimum customer connectivity clause” of the contract and if that happens, you can rest assured that Batelco will come down on Lightspeed like a tonne of bricks with hefty fines already designed in their contract. The repercussions – without the Jordan Telecom muscle – could very well be bankruptcy should they not take care of this particular problem.
Still, residential packages as they have offered could be their ultimate salvation. But they are sitting on a knife’s edge and they have to manage it very very carefully. If they sell a lot of these packages and they ultimately find they have a lot of unsatisfied customers due to the high contention ratios they will shoot themselves in the foot. Actually they would have shot off the whole leg. It’s that serious ironically because customers in 8 – 12 months’ time will have a much bigger choice than that currently enjoyed.
This is a similar situation – business wise, I am told, between Batelco and Kalam where the former who has been branded the latter as a “bad payer” with all the conditions that ensues on their relationship and ultimately customer base. There is nothing worse than falling foul of a business supplier. I hope they can re-capitalised (again?) in order to remove that particular stigma and be more creative in their offerings. We hardly hear of Kalam now.
There are also those malicious rumours doing the rounds that a telecoms company has not paid its employees for 6 months! I don’t know about the employees themselves, but had that been me I would have chucked that company in a long time ago and wrote the unpaid salaries off rather than keep with the headache of “will I get paid this month.” Telecoms companies are not alone in this boat of course, other major media companies do suffer from the same, uh, variable salary pay days just to keep employees (and their personal loaning banks) on their toes.
Which brings me to another question mark point here: Is it ego that is driving MENA Telecom or is it really good business sense? Why would anyone invest in a technology that has not solidified yet and why depend on a single vendor to take you down that path? Why invest such a huge sum of money in it without first testing the market properly or simply building a viable business case?
Why would it invest the huge sum of US$60 million in a market whose best estimates of broadband users is 60,000 and the vast majority of whom are on the Batelco 10 Dinar package per month?! What and where is their particular market? Please tell me! Unless they wish to take on Batelco head-on in the broadband business but then Batelco is operating on completely depreciated copper while MENA is going for the ultra new WiMax technology! If they do get even 100% market ownership of that “huge” 60k user-base, where can they make their money? I doubt very much that they will make it from VPN or DVB services. I can understand that a few business customers (and by few I do mean few) going for their VPN solution, but as we do not have any media infrastructure to speak of in this country, I would be kind enough to them to assume that they actually copied their business solutions from the Motorola WiMax brochure rather than have conducted proper market research! Could they please give the salesman who sold them that “solution” my number? I am in desperate need of as good sales staff. Still, they will be successful. They’ve got KFH to hold their back and it won’t allow it to fail. Industry watchers think that MENA might have gone bankrupt twice already save for KFH’s deep pockets.
So where does all of that leave us the consumers in this Jewel in the Arabian Gulf?
It certainly gives us more options, entrants are now coming up with nice packages but unfortunately they are not very well thought out business cases as we have seen from the above, but one could be forgiven for seeing a similarity in this and “birth pains”. Ultimately the good will rise because of innovative offerings while others will just naturally disappear from existence. This is the nature of a deregulated market and that is what we should expect more of.
What would really deregulate the market; however, is splitting Batelco into at least 2 businesses: one managing the wholesale which should own the infrastructure, while the other continue to offer the retail services. This will allow its retail operation to fairly compete in the market and with its own self. Rather than continuously being at loggerheads with the TRA for hiked prices offered to its customers and much more importantly allow new business entrants to come into the market and boldly provide new innovative services without having to worry that the rug will be pulled from under their feet at any moment.
With the various schemes and announcements from potential competitors like 2Connect with their 30% reduction in tariffs for broadband changes when compared to Batelco, the mediocre and meagre offerings of MTC Vodafone’s 3.5G access and latest from both MENA Telecom and MTC Vodafone’s WiMax initiatives, Batelco surprised no one when they announced yesterday in their press conference that they are reducing the tariffs of business broadband by 25% while 2 new packages were introduced at a reduction for businesses with an unlimited threshold. That’s the good part, the bad of course is that they are still too expensive when compared to the rest of the world and there is a lot of improvement room left not only in price, but also for the speeds available, which, I am certain, will come along a lot faster now that competition is heating up.
I refuse to believe that these changes have happened to “help” the community, Batelco had ample time and resources to do that amidst the community passionate appeals for them to do so, they brushed those appeals aside, lifted their noses high and went ahead and did what pleases them. So the following seems rather strange coming from them, it is as if they have just woken up to the power of communications in general and are philanthropically and selflessly now contributing to the country’s development and global competitiveness:
â€œInformation and communication technology (ICT) and e-services can complement the kingdomâ€™s financial sector in accelerating Bahrainâ€™s future economic growth,â€ he noted.
â€œTo enable businesses and ministries to embrace the advantages of electronically delivered services, the availability and cost of high speed broadband connectivity is crucial.
â€œBatelco has, therefore, introduced new managed data services and reduced its prices for business broadband by 50pc.â€
This will create the most competitive rates for high speed dedicated Internet access across the GCC, said Mr Kaliaropoulos.
â€œOnline delivery of services and information by ministries and businesses, not only creates a sustainable, knowledge-driven economy but also creates high value jobs and encourages innovation in creating and delivering content via portals and fixed and wireless devices,â€ he said.
â€œFixed and wireless broadband technologies introduced by Batelco and now, extremely competitive Internet access services, are crucial components for regional leadership in e-services.â€
No Mr. Kaliaropoulos, what you did is respond to mounting competitive pressures, which a normal company is fully condoned in doing of course; however, Batelco, being effectively the sole operator in the country and the criticality of its product in the development of our economy and creativity, you should have responded without having to wait for the competition to knock on your door. Had you done so, you would have already realised the increased market size and profitability as you have already noticed in your mobile telephony offerings:
“Competition in the market created new customers and did not affect the company too much as it lost only about 15% – 20% of its customers while mobile users increased from 300,000 to about 620,000 subscribers in Bahrain”
The question now is will the TRA play your game and allow you to offer these prices? I hope they will, but only to force you and your competitors to achieve better competitiveness through efficiency and strengthening the market size in order to offer even more reasonable reductions in exorbitant tariffs.
The TCCM shows the extent of connectivity of individuals in a certain country whether via fixed lines, cellular lines and/or Internet.
What about broadband I hear you ask?
The Arab World still lags behind developed countries in the penetration and use of broadband Internet and Internet access at large. For example, Bahrain leads the Arab World with a 5.79% Internet broadband penetration (total broadband accounts by total population). Still this is much lower than Denmarkâ€™s 32%, South Koreaâ€™s 29% or the United Statesâ€™ 20%.â€
5.79%, that’s it? For a country that is supposedly “wired”, this is what we have? What pittance. Of course, Batelco’s game is margin over revenue, not stopping for a second to consider that should they open up this market and uncap the stupidity they call “broadband” will most possibly unleash the creative juices and we might, just might, start using the Internet for commerce and entertainment as it should be used, rather than having to count the bytes as if this is still the telex age.
Let’s see how the “traditional” press spins this one out tomorrow; I predict a big bold headline in the GDN… hold on, it’s coming it’s coming; ahhhh: