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Bahrain 4G auction founders under deluge of legal action

When we said 'new', we meant 'incumbent'. Freudian

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The Kingdom of Bahrain should have completed its 4G auction by now, but instead the process has been kicked into touch following legal action from an excluded operator.

The auction, cleverly titled "Post 3G" (PDF, slide deck with plenty of visuals), was announced last November and initally open to all, but lobbying from the three incumbent operators resulted in an amendment restricting the bidding to existing licensees.

That was fine until Mena Telecom, the Kingdom's WiMAX operator, pointed out that it, too, was an existing licensee and planned to bid, forcing a second rewrite of the auction rules. This in turn prompted legal action from Mena and the suspension of the auction.

Mena Telecom isn’t a mobile operator; it provides fixed internet access to homes and businesses using WiMAX signals, but that's a business in which the three mobile operators already compete, and the swathes of frequency about to be auctioned off will make that competition much easier.

The auction includes bands at 800MHz, 1800MHz, 2.1GHz and 2.6GHz - more than enough to let any winner offer fixed and mobile services.

The auction rules - "Invitation to Tender" - are on the regulator's site, along with one Clarification, an Amendment, and five Public Notices regarding the changes to the invitation and the ever-slipping timetable. It's all neatly summarised by the changes to Section 1.4, which used to read:

Any interested party that wishes to obtain the right to use any of the frequencies specified in Section 3.1 below, is invited to participate in the Auction

...but now reads...

Any Incumbent Mobile Operator that wishes to obtain the right to use any of the frequencies specified in Section 3.1 below, is invited to participate in the Auction

...with Public Notice 4 spelling out the exclusion of Mena Telecom, and prompting the legal challenge:

the Authority will limit eligibility for assignment of the frequencies being released in the referenced tender to the three existing holders of individual licences for the provision of mobile telecommunications services

This clause explicitly excludes Mena, despite its wireless credentials.

With a population of 1.3 million and mobile penetration at 133% (PDF, 4th page), the Kingdom of Bahrain's mobile operators are fiercely competitive. Viva and Zain are at each other's throats while former monopoly Batelco taunts them from the sidelines.

But that competitiveness is driving the operators into loss as they struggle to acquire and maintain customers, which is why they don't want new entrants - or existing players - taking away the profitable parts of the market.

The operators' positions are safe until the legal action is settled, and just like their UK counterparts they have nothing to lose by the delay. As long as it hits them all equally, that is. ®

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