DLA Piper Intelligence

Telecommunications
Laws of the World

Overview of legal landscape

Bahrain
Bahrain

Bahrain is one of the smaller markets in the Gulf region, with a population of about 1.2 million residents. However its proximity to Saudi Arabia (to which it is connected by a bridge) means that traditionally it has a large volume of roaming traffic. 

Despite its small market size Bahrain has possibly the most advanced, and liberalised, regulatory regime in the region.

It currently consists of three mobile operators, two fixed wireless operators, a number of ISPs and a number of fixed line operators, the largest of which is the incumbent Batelco. 

Last modified 5 Oct 2016
Overview
Bahrain

Bahrain is one of the smaller markets in the Gulf region, with a population of about 1.2 million residents. However its proximity to Saudi Arabia (to which it is connected by a bridge) means that traditionally it has a large volume of roaming traffic. 

Despite its small market size Bahrain has possibly the most advanced, and liberalised, regulatory regime in the region.

It currently consists of three mobile operators, two fixed wireless operators, a number of ISPs and a number of fixed line operators, the largest of which is the incumbent Batelco. 

Last modified 5 Oct 2016
Laws and regulations

Legislative Decree No. 48 of 2002 Promulgating the Telecommunications Law ('Telecoms Law') is the primary legislation governing the telecommunications sector in Bahrain. It established the Telecoms Regulatory Authority (TRA) and empowers it to regulate the telecommunications and information technology sector.  The Telecoms Law also stipulates that the appropriate Government Minister must, in consultation with the TRA and on a three-yearly basis, issue a National Telecommunications Plan to be approved by a resolution to be promulgated by the Council of Ministers.  The most recent National Telecommunications Plan was published in 2012.

In addition to the above, the TRA has issued various Regulations and documents which provide further guidance on facets of the telecommunications sector in Bahrain. A complete list of these is available on the TRA website. These include the following:

  • Position Papers on VoIP 2004 & 2007

  • Guidance Paper on TRA Treatment of Confidential and Non-Confidential Information 2007

  • The Guidelines for Telecommunications Infrastructure Deployment 2008

  • Bulk Messaging Regulation 2011

  • Local Loop Unbundling Order 2011

  • Number Portability Process Specifications 2011

  • Consumer Protection Guidelines 2011

  • Wholesale Inbound Telecommunications Services Regulation 2012

  • Dispute Resolution Guidelines 2014

  • Guideline for Fines Relating to Articles 35 and 65 of the Telecommunications Law 2014

  • Future Ex-Ante Market Regulation and Other Regulatory Measures to Foster a Dynamic Sector Development 2014 (Draft Report)

Last modified 5 Oct 2016
Regulatory bodies

Telecommunications Regulatory Authority

Address: 5th Floor, Building No. 852 Road No. 3618 Seef 436, Manama, Kingdom of Bahrain, PO Box 10353

Website: http://www.tra.org.bh/en 

The regulation of the telecommunications and information technology sector in Bahrain falls under the ambit of the Telecommunications Regulatory Authority (TRA). The TRA was established in 2002 as a 'financially and administratively independent juridical entity' with the power to, inter alia:

  • Issue regulations, orders and determinations relating to the telecommunications sector

  • Approve applications for and issue Telecommunications Licences and Frequency Licences

  • Monitor and investigate compliance with relevant laws, regulations and licence terms

Last modified 5 Oct 2016
Regulated activities

The Telecoms Law stipulates that a licence is required in order to operate:

  • A fixed or mobile telecommunications service available to the public

  • Any network permitting the conveyance of messages, sound, visual images or signals between defined termination points by wire, radio, optical or other electro-magnetic means using a frequency designated for telecommunications use in the National Frequency Plan

  • Provide a telecommunications service

Last modified 5 Oct 2016
Registration / licensing

Licences are generally granted for a period of 15 years and renewable for a further 10 years.

Licences that require the use of some form of resource, such as land, spectrum or numbers are issued as Individual Licences. Licences that do not require the use of these resources are issued as Class Licences.

Individual Licences may only be granted on the recommendation of the General Director of the TRA following ratification by the TRA's Board of Directors. Unless compelling reasons exist, all Individual Licences are issued with standard terms. Any entity that directly or indirectly acquires a stake of 5% or more in an Individual licensee must inform the TRA within seven days of the acquisition.

The TRA issues the following types of Individual Licences:

  • Mobile Telecommunications Services Licence (Note: No further licences of this type are currently available)

  • Paging Services Licence

  • Public Access Mobile Radio Services Licence

  • International Telecommunications Facilities Licence

  • International Telecommunications Services Licence

  • National Fixed Services Licence

  • National Fixed Wireless Services Licecse (Note: No further licences of this type are currently available)

  • Internet Exchange Licence

The TRA issues the following types of Class Licences:

  • Internet Services Licence

  • Value Added Services Licence

A list of companies currently holding Bahraini telecommunications licences can be found here. 

Last modified 5 Oct 2016
Establishment

A licensee must be incorporated in Bahrain or have a registered branch office in Bahrain.

Subject to certain exceptions, substantially all of the infrastructure and personnel associated with the provision of the telecommunications service must be located within Bahrain.

Last modified 5 Oct 2016
Interconnection/roaming

The Telecoms Law provides licensees with a right to interconnect. Licensees must seek to negotiate, in good faith, requests for interconnection at any technically feasible point.  Any party may refer a dispute regarding interconnection or access to the TRA for resolution if no agreement is reached within one month of the commencement of negotiations between the parties.

The Telecoms Law also stipulates that a licensee adjudged by the TRA to have a dominant position in a particular telecommunications market must (within three months of such determination and every six months thereafter) publicise a TRA approved Reference Interconnection Offer (RIO). The terms and conditions of such a RIO must be 'fair, reasonable and non-discriminatory', and the tariffs outlined therein must be based on forward-looking incremental costs or benchmarked against tariffs in comparable telecommunications markets. Interconnection must be provided to any other operator, if requested, on the terms and conditions set out in the most recent RIO.

Licenced operators are also barred from 'materially preventing, restricting or distorting competition' by either:

  • Abusing (collectively or independently) a dominant market position

  • Entering into an agreement or understanding which materially prevents, restricts or distorts competition in the market

  • Causing anti-competitive changes in market structure (in particular via anti-competitive mergers and acquisitions)

The TRA regularly evaluates the market through surveys and reviews, and recently commenced a Strategic Market Review in December 2014 entitled 'Future Ex-Ante Market Regulation and Other Regulatory Measures to Foster a Dynamic Sector Development'. This review proposes the lifting of ex-ante regulation in all retail markets.  Implementation is to be undertaken in a phased manner and is stated as being 'subject to the [dominant] operator first meeting, in practical operational and market tested terms, prescribed terms and conditions for fit-for-purpose wholesale products (ie terms and conditions which allow [other licenced operators] to, whenever relevant:

  • Replicate the retail products and services of the dominant operator in the relevant market(s)

  • Have access to equivalent products as the wholesale provider has (eg broadband access and backhaul fibre for LTE operators)

At the time of drafting this handbook the Strategic Market Review process was on-going. A copy of the draft Strategic Market Review can be found here

Last modified 5 Oct 2016
Consumer protection

The Telecoms Law also stipulates that tariffs should be 'fair, reasonable and based upon forward looking costs' and charges the TRA with protecting subscribers and users in respect of:

  • The tariffs charged for services

  • Availability and provision of services

  • Quality of services

  • Protection of personal particulars and privacy of services

Citing these obligations, the TRA issued the Consumer Protection Guidelines in December 2011.  These guidelines lay out minimum requirements for Standard Subscriber Agreements and require all licensed operators to provide users and subscribers with 'clear and comprehensive information about tariffs, terms and conditions for available products and services'.  It also imposes, inter alia, the following requirements:

  • Standard Subscriber Agreements and Codes of Practice which must be approved by the TRA

  • All advertisements for services must include tariffs for premium rate and value-added service

  • Bills provided by the operator must be clear, accurate and easily understandable

  • Enquiries, complaints and problems must be dealt with fairly, promptly and courteously

  • Operators must not discriminate between consumers

These obligations supplement the more general requirements laid out in Law No. 35 of 2012 Concerning Consumer Protection.

Last modified 5 Oct 2016
Taxes and fees

Application fees for the various available licences range from BD 1,000 (approx. USD 2,650) for class licences to BD 35,000 (approx USD 92,850) for certain individual licences. Once an entity obtains a licence, it will be required to pay the prescribed licence fee to the TRA (usually set at 1% of the gross annual turnover attributable to the licensees activity).

There is no corporation tax in Bahrain. However, other fees may be payable, such as a contribution towards employees' social security. This may differ depending on the composition of the company's workforce. Such fees must be assessed and advised upon on a case by case basis.

Last modified 5 Oct 2016
Enforcement

The Telecoms Law states that any entity which contravenes the law shall be criminally liable for those actions, most notably, providing telecommunications services without a licence.

The TRA also has powers and responsibilities to ensure licensees' compliance with licence conditions and the law. Under these provisions the TRA is empowered to take 'the measures it considers necessary to secure compliance by the licensee'.  These measures include:

  • Directions to refrain from doing certain actions

  • An order to remedy, prevent or rectify a breach of the law or licence

  • The imposition of an appropriate fine

  • A warning that the licence may be revoked if the licensee fails to comply with the above

The TRA has issued guidelines which outline the process for determining the size of the fine to be imposed for anti-competitive behaviour and breach of licence conditions. In line with the Telecoms Law, these guidelines cap any such fine at 10% of the entity's annual revenue.

Before issuing an order, the TRA should inform the licensee of the details of the impending order and give it the opportunity to respond within a specified period. Once an order has been issued the licensee in question must comply with its requirements within the stipulated period or face the possible revocation of its licence.  However, a licensee is entitled to appeal any decision or order that has been issued in its name.  This can be done directly to the TRA or through a statutory arbitration process.  Bahrain is unique amongst the GCC states, in that its Telecoms Law has a statutory arbitration process designed to allow operators to challenge TRA decisions.

Last modified 5 Oct 2016
Contacts
Paul Allen
Paul Allen
Partner, Head of Intellectual Property and Technology
T +971 4 438 6100
Eamon Holley
Eamon Holley
Legal Director
T +971 4 438 6100
Last modified 5 Oct 2016