Batelco subscriber base up 12% in nine month

Batelco Group CEO, Shaikh Mohamed Bin Isa Al Khalifa
With 12% increase in its subscriber base since January, Batelco Group’s operating performance remained steady with, according to Group CEO, Shaikh Mohamed bin Isa Al Khalifa.

“Across the Group, our focus has been on enhancing competitiveness in our home market, Bahrain, and at our subsidiary companies. This has meant both ensuring we remained as innovative as possible in our approach to serving our customers as well as in the manner in which we manage our operations,” Shaikh Mohamed in a statement said while commenting on the nine months results.

“For us, one strong measure of success has been the growth we have achieved in our subscriber base since the start of the year. We’ve seen a 12% growth in customer numbers for the nine month period, bringing us to 7.4 million users across the Group. We are especially pleased to have achieved growth during the summer months and Ramadan period, where subscriber renewal and activity has historically been lower.

“In Bahrain, where competition is robust, we have maintained our leadership. Overseas, advancements have also been made. In Jordan, customer response to the launch of Umniah’s 3.75G services in late June has exceeded expectations. Similarly, Yemen has turned a corner with normalizing conditions in the country and the resulting resumption of growth at the company.”

Mobile subscriber numbers grew 4% on a quarter-over-quarter basis but recorded a decline of 5% year over year. This decrease when compared to the corresponding period in 2011 is largely due to tough and ongoing competition in Bahrain and the rationalization of the customer base in Yemen, which took place in the first quarter of 2012. However, gains made over the last three quarters reflect positive upward trends in Jordan and Yemen, which are expected to continue, as well as success in Bahrain in protecting market share, including in the high value segment.

Broadband customers for the period increased by 21% quarter over quarter and showed a healthy 31% increase on year-over-year basis and 28% since the start of 2012.

“Efforts to innovate and our continued focus on maximising customer experience and satisfaction have enabled Batelco to maintain our market leadership in the Kingdom across the full spectrum of communications services. This is despite the highly competitive nature of the market and a restrictive regulatory environment, which continues to impact growth,” Shaikh Mohamed, said.

At the end of the third quarter, Batelco maintained a strong 42% share of the mobile market. Whilst this reflected a decrease of 9% when compared to the previous year period, the operation witnessed 64% year-on-year growth in mobile broadband subscribers. The growth in mobile broadband subscribers was consistent with previous trends and supported by ongoing services upgrades which continue to make the company’s service faster and more reliable.

Demand for fixed services, conversely, decreased during the quarter. Fixed broadband and fixed line subscriber numbers reduced by 12% and 6%, respectively, year over year whilst remaining relatively stable since last quarter. These results are in line with industry trends, particularly in the MENA region where users continue to migrate from fixed broadband and telephony to wireless and mobile technologies.

“Due to the nature of the market in Bahrain, we have naturally been unable to achieve growth in absolute numbers in the mobile market. Nevertheless, we are focused on retaining our high value business and residential mobile and data customers. We’ve done a solid job of this and are particularly pleased with the exponential growth we’ve achieved in mobile data subscribers. The same holds true for wireless broadband, where we continue to report strong increases quarter after quarter. As we’ve said, success for us can only be achieved through innovation, which we remain fully committed to,” added Shaikh Mohammed.

“We have ended the third quarter with a growing customer base and strong cashflows but lower than expected profit results. We will continue to transform our operations to ensure we become as efficient an organisation as possible. Our restructuring programme at Batelco Bahrain will drive savings of BD20million annually from 2014 onwards and will allow a better alignment of our cost structure to the competitive environment. We will continue to look for acquisitions of complementary businesses which will add scale, maximise synergies and grow our revenue base.”

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