FAILURE by Batelco to allow other operators fair access to Bahrain’s underground Internet lines could result in the company being formally split into two separate entities, according to the telecom watchdog.

It is already being restructured into two different divisions as part of a strategy to open up the market, which is in turn expected to drive down broadband Internet bills and give more people access to Bahrain’s fibre-optics network.

However, if targets for impartiality and pricing are not met the Telecommunications Regulatory Authority (TRA) is threatening a more permanent severing of the company.

“Currently the cost of underground telecom infrastructure is shouldered by Batelco and offered to its customers, but not others,” TRA acting general director Shaikh Nasser bin Mohammed Al Khalifa told the Shura Council yesterday.

“When it (Batelco) is separated there will be competition in (broadband) ground services, which will reduce the cost of services for consumers and Batelco – and enable further reach across the country, which is not happening now.

“Batelco will cover the cost of its work by offering ground (fibre-optic) services wholesale to others.

“We have targets for neutrality and pricing that we want met.

“Should they (Batelco) fail to do so, then we will study the legal aspect of dividing it into two companies.”

He added the TRA was not responsible for determining whether each Batelco division should have its own chairman and executive management, adding that shareholders would not be affected.

“We just want to ensure fairness in the telecom market that would allow it to develop by May 2019, which is our deadline,” he added.

Batelco’s current restructuring will result in one division responsible for its retail business and another charged with operating the country’s broadband network.

The latter is obliged to ensure Batelco’s competitors get equal access to Bahrain’s broadband infrastructure, including fibre-optic cables.

It effectively ends Batelco’s control of the nation’s fibre-optics network, since its rivals will be able to offer the same service to their customers on an equal basis, creating a more competitive environment.

“Its (the broadband network’s) name is the national telecom underground cables network and it shouldn’t be monopolised by Batelco,” said Parliament and Shura Council Affairs Minister Ghanim Al Buainain.

The move is not only expected to bring down costs for consumers, but also speed up development of the sector.

It was initiated by a royal decree issued last September, which parliament retrospectively approved on March 20 and the Shura Council approved unanimously yesterday.

The development is a key component of the country’s Fourth National Telecommunications Plan, which was approved by the Cabinet in March 2016.

Transportation and Telecommunications Ministry telecommunications director Mosab Abdulla said the reforms were needed to promote competition.

“Everyone should be competing on the same level when it comes to fibre-optics and this is not the case at the moment,” he said.

“There may be other providers who may want to enter with Batelco as partners in fibre-optics and this move will allow them to do so.”

However, Shura Council financial and economic affairs committee chairman Khalid Al Maskati said Batelco’s assets needed to be evaluated to ensure a fair split.

“We don’t know what will go to the new entity and what will remain with the other one,” he said.

“An evaluation of the assets is needed so shareholders know the gains of this futuristic step.”

Batelco chief executive Mohamed Bubashait told the GDN last month that the two new divisions were expected to be operational by the third quarter of this year.

mohammed@gdn.com.bh