Batelco

Batelco's plan of destruction

Batelco used to be the only telephone company in Bahrain. The people of Bahrain were solely dependent on the them for services like the internet and telephone lines. So this implied that Batelco was cashing in pure profits since it was the only provider of these services and there were no competitors to compete against them.

However, things changed when MTC Vodafone entered the market. Although MTC provided only telephone services, at the same time it provided many facilities to those that will join there company. Thus, many people were eager to join the new company due to the many services that it provided. This was a major blow to Batelco since now it had to wake up from its fantasy world and enter into the real market and face the competition.

Many people left Batelco and joined MTC whereas others stayed loyal to Batelco. Now all that has been said is fine and dandy, but to me I believe that Batelco did not like the idea of losing a million or two, so they decided to capitalize on the thing that MTC doesn’t provide which is the Internet.

Since Batelco is a governmentally owned company, they should be thinking of satisfying the people and not there pockets. To show how selfish they are, the following is a break down of how much profit Batelco has received from 1996 to the first quarter of 2006:

BD (millions) Revenue Net profit

1996 102 28

1997 114 32

1998 132 43

1999 142 48

2000 152 53

2001 171 54

2002 186 58

2003 192 61

2004 204 83

2005 226 89

2006 (1st Qtr) 53 23.2

Batelco made revenue of 1.674 BILLION Bahrain Dinars, that’s about US$4.440 BILLION. That made them a profit of BD 0.572 BILLION in pure, net, profit. That is equal to US$ 1.517 BILLION. That means that their NET Profit is approximately 34%. Other than drug dealers, who else can make that kind of net profit? And then restrict the future of a whole country doing so?

Peter Kaliaropoulos is the genius to come up with the plan of making a limit for internet users; however I should mention that he is a genius only in the eyes of those that benefit from the profits of Batelco, because otherwise he is now officially the most hated person in Bahrain. To find out more about the hatred that has grown towards him, please check the following two websites (www.BoycottBatelco.com and www.mahmood.tv).

Peters plan was to change the usual internet line with no limit to a limited use line but with a faster speed. If Batelco has used this approach and asked the customers to pay a little more for a faster speed but with no limit of usage, it would have been fine. But no Batelco wanted more money as if they aren’t getting enough as it is, and decided to lay down

the following rules:

• For BD 30 -8GB

• For BD 40-15GB

• For BD 60 -20GB

For normal users who will use the BD40, it means getting 512Mb per day which is less than one movie per day. This strategy shows that Batelco only took their profits in mind when they drew up this plan and not the satisfaction of the customers.

When we look at the strengths and weakness of this plan we can see that:

Strengths:

1) Monopoly: Batelco is the only company to provide the internet service in Bahrain and thus it can charge the prices that it likes and the people will have to pay.

2) Control: By using this method they can control the amount of usage done by the customers which will reduce there cost. This will also help in ensuring that more customer will be asking for internet connections because for example: if a house has 3 children who use the internet