Annual Report 2008 - TRA - Telecommunication Regulatory Authority

18 TRA Annual Report 2008 Building a Competitive Market
package of nine regulatory measures it intended to implement that would further promote competition and deliver
significant benefits to consumers. Comments were invited and the final proposals were published on 3 June.
Eight of these measures were put in place, or the implementation process was started, during 2008. These were:
A third mobile operator licence
Removal of certain tariff approval processes
Data collection, including consumer surveys and price benchmarking
Local Loop Unbundling
Carrier selection and improved Carrier Pre-Selection (CPS)
Competition guidelines
Number portability (fixed and mobile)
Reform of retail tariff regulation
The final one - the removal of mobility restrictions for National Fixed Wireless Services (NFWS) licences – is scheduled
for 2010.
At the same time as the final proposals were published in June, TRA issued its final determination detailing the retail
markets in which Batelco was deemed to have significant market power. These included fixed line and leased line
services.
Third mobile licence
Two operators, Batelco and Zain, currently compete in the Kingdom’s mobile market. The introduction of a third
operator would stimulate not only price competition and better value for money but also the drive for innovative
mobile services. There are clear benefits to users but also to operators, because their improved range of services will
help them compete more effectively in other international markets.
In early April TRA invited expressions of interest as well as opinions on issues such as preferred spectrum range and
bandwidth, infrastructure sharing, national roaming and an exclusivity period. Six companies had expressed an
interest in the licence by the closing date in May.
In July, following a tender which attracted 15 high quality proposals, TRA appointed Telecommunications Management
Group (TMG) Inc of Arlington, Virginia, USA, to design and manage a competitive process for the award of the third
mobile network operator licence.
Through the auction process TRA was looking for an operator with experience of managing a significant size of
customer base, and one that would bring established agreements with content providers and mobile partners.
Speed to market in the Kingdom was a priority for TRA. The third operator was also expected to share infrastructure,
e.g. masts, with existing operators.
In September the Board of Directors of TRA approved the recommended competitive award process - by auction -
and the final tender documents. The process comprised a multi-stage qualification procedure and a final financial
round for suitably qualified bidders. Transparency was a key feature throughout the process. By the deadline four
companies had registered as prospective bidders in the auction.
On 12 January 2009 TRA announced that it had received only one bid, from Saudi Telecommunications Company
(STC). The bid had passed the initial administrative checks but the dedicated team at TRA then evaluated the technical
and commercial aspects of the bid against the qualification criteria. On 22 January 2009 TRA announced that STC
was the successful bidder with a bid of BD 86.687 million. STC operates in Saudi Arabia and six other countries. The
company has over 60 million subscribers who have access to the latest mobile technologies.
As part of their bid STC are committed to constructing, in the near future, a robust high-quality advanced mobile
network offering quality services. The bid also contained a corporate social responsibility obligation under which
1 per cent of revenue will be used, among other projects, to develop e-health, e-learning and sports facilities within
the Kingdom. STC has also undertaken to establish a venture capital fund which will focus on the development
of ICT.