Monday, February 25, 2008

Bahrain - privatisation

Telecom revolution!

The government yesterday announced a plan to revolutionise the telecommunications industry in Bahrain by selling off its majority holding in Batelco.

A statement said the government undertakes to dispose of the majority, if not all of its shares, within Batelco over the next three years.

"This will enable Batelco to operate with full independence from the government and to be free to make wholly-commercial decisions.

"The government will continue to treat Batelco equally to any other licensed operator. Government ownership in Batelco is, and will continue to be managed by a body clearly separated from policy and regulatory decisions and entrusted only with the financial management of its investment."

The sale is part of the government's second national telecommunications plan, which was announced yesterday.

The government currently holds 36.7 per cent of the shares in the telecom firm through its holding company Mumtalakat. A further 20pc is held by its investment vehicle Amber, while 10pc is held by the General Organisation for Social Insurance.

The company is currently valued at about BD1.2 billion ($3.2bn) on its traded share price but it is likely any buyer of the government stake would be prepared to pay more than that.

The sale is expected to attract interest from regional operators with the UAE's Etisalat, Qatar's Qtel and Saudi Telecom - all possible bidders for the shares.

Orange and BT are also companies that could be interested in the firm, according to an industry expert.

"One of the most significant factors that will encourage investment by international companies in Bahrain and the growth of the telecommunications industry in general is a stable and reliable regulatory environment, matching the market and technological developments," the government statement said.

It also said that during the three-year plan it would look at the scope and powers of the Telecommunication Regulatory Authority (TRA) to see if they needed to be adjusted.

"Because of the necessity to adopt policy, regulatory and institutional framework to the changing technological environment and market development, the government will review the telecommunication law during the period of this current plan."

"We welcome this plan," said TRA director general Alan Horne.

"This gives firm direction in supporting the TRA take the necessary steps to create a healthy competitive environment to benefit the consumer."

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