Bahrain

Information, Communications & Technology

March 2013

Bahrain Factsheet March 2013

Summary
Bahrain boasts the Middle Easts most liberal and advanced information, communications and technology (ICT) infrastructure and policies, with one of the highest mobile and internet penetration rates in the region.

The 2009 Total Country Connectivity Measure (TCCM) report, commissioned by the Arab Advisors Group, found that Arab broadband Internet markets have registered very positive growth. The group calculates the TCCM by adding the household mainline penetration, cellular penetration, and Internet users penetration rates in each country, and surveys 19 countries across the Arab World: Bahrain was ranked in fourth place.

IT leaders Cisco hosted their industry-accredited Networkers event in Bahrain in March 2010, for the first time in the Middle East. Aimed at training, education and networking, the event was held at the Bahrain International Circuit in Sakhir, south of the capital, Manama.

The Kingdom has long been regarded the Gulfs technological pioneer. With its open and forward-thinking approach, Bahrain has proven to be an ideal testing ground for the introduction of new technologies to the region and Bahrain has experienced a fast rate of innovation.

Statistics released by the Telecommunications Regulatory Authority (TRA) in Bahrain in 2010 and 2011 demonstrated that Bahrain is at the forefront of endorsing ICT, telecommunications and related services. The volume of Internet users increased dramatically from 161,815 in 2009 to 413,000 as of Q2 2012.1.

http://www.tra.org.bh/en/pdf/2012TelecommunicationsmarketsindicatorsvFforpublic.pdf

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Background
Computing started in Bahrain in the late 1940s and the Kingdom was the first country in the region to install a mainframe computer, the IBM 1401 model, at Bahrain Petroleum Company (Bapco) in 1962. Bahrains first telecommunications link to the rest of the world dates back to 1864, when Bahrain was the first country in the region to be connected to the Indo-European undersea telegraphic cable.

Bahrain entered the age of satellite communication as the Middle Easts first satellite station was commissioned at Ras Abu Jarjour in 1969. Bahrain became one of the first countries in the world with complete digitalization of its national and international telephone switches in 1992. It was also the first country in the region to join the Information Superhighway with the launch of its Internet service in April 1995.

Bahrain was the first country in the Middle East to: Completely digitise its national and international telephony switches (1992) Hold an online referendum (2001) Introduce 3G and 3.5G high-speed mobile broadband services Introduce Smartcards (2005) Fully deregulate and liberalise its telecommunications market (2004) Provide nationwide WiMax wireless network (2007) Establish First nationwide Next Generation Network (NGN) in the world (2008)

Bahrain is the only country in the GCC to have ratified a Free Trade Agreement with the United States of America which facilitates the exchange of technology expertise. The possibilities for long-term opportunities in outsourcing for Bahrain in niche areas of software development are rich
Shaikh Mohammed bin Essa Al-Khalifa, EDB Board Member

Bahrain Factsheet March 2013

Business Opportunity
The Bahrain ICT market is expected to grow and is being driven by the high demand for IT products and services from both the public and private sectors. The growing need for robust IT solutions is also being driven by massive eGovernment and eCommerce initiatives, which are aimed at achieving economic diversification.

A recent analysis of the ICT market in the region, conducted by an independent research company reported that the Middle East had the highest potential growth in the global ICT market.

Bahrain offers low entrance costs and its rapidly developing market is rich with opportunity. The Kingdom was the first country in the GCC to have ratified a Free Trade Agreement in 2006 with the United States of America, facilitating the exchange of technology expertise and providing long-term opportunities in the outsourcing of software development.

Making Business Easy

Bahrains eGovernment strategy aims to have over 90% of key services available online. For business, this includes business and office registrations, work permits, banking services, environmental compliance and the eTendering of government contracts.

By way of example, in May 2012, a partnership was established between Korean firm, LG CNS and the eGovernment Authority of Bahrain, to implement Bahrains Business Licensing Integrated System (BLIS), a turn-key integrated solution for electronic application and renewal of Commercial Registrations and related licenses.

The concept of e-government is long-established in Bahrain with a number of government services available on the Internet. For example, residents can pay utility bills, traffic fines and visitors can apply for tourist visas online. As a part of this service, 200 key services were

Bahrain Factsheet March 2013

identified for delivery through electronic channels for both residents and businesses in the near future.

The government intends to invest in new technology providing citizens with access to its 200 e-services through the use of a single electronic identity.

In November 2009, the eGovernment Authority entered into two MOUs with the Strategic Council for the Global Alliance for ICT and Development (GAID), part of the United Nations Department for Economic and Social Affairs. The agreements set out the framework for the establishment of a GAID office in Bahrain, in partnership with the eGovernment Authority, and the creation of a number of joint programmes including eLiteracy promotion.

In June 2010, Bahrain became one of only three countries to receive a UN e-Government special award for making significant progress in improving its e-service and strengthening its service delivery through e-participation. Bahrain was also one of 23 countries from around the world to receive a Public Service Award from the UN

At the National Global Alliance for ICT and Development (GAID) of the UN Department of Economic and Social Affairs seminar in August 2010, it was announced that the Bahrain eGovernment, in its capacity as an exemplary leader in the ICT field, was planning a development centre, which will serve as a vital resource for the governments of developing countries. The centre will be a training and consultancy centre based in Bahrain that will assist various countries based on their needs and requirements, helping them achieve the millennium development goals (MDGs) set by the United Nations, using ICT tools and modern communications technology.

In January 2012, Bahrain was ranked second in the Gulf and wider Middle East in a United Nations e-government survey. The UN Global e-Government Readiness Survey placed the Kingdom 36th of 192 countries worldwide in its application of ICT to provide access and inclusion for its citizens.2 In the survey, Bahrain outperformed the world average across eReadiness, Web Measure, Infrastructure, Human Capital and e-Participation.

UN e-government survey 2012 results http://www2.unpan.org/egovkb/datacenter/CountryView.aspx

Bahrain Factsheet March 2013

A new National eGovernment Strategy 2016 has recently been announced which aims to benefit businesses, individuals and the government. The objectives of the strategy are to: Achieve next generation government excellence Deliver high quality services effectively Value efficiency Advocate proactive customer engagement Nurture entrepreneurship Collaborate with all stakeholders Encourage innovation

Plans are also underway by the eGovernment Authority and the Tender Board to launch an eTendering System to encourage participation and apply fairness by conducting an online tendering process. The system helps automate the work-flow through the process of prequalification, opening, evaluation and awarding.

Broadband in Bahrain
Both fixed and wireless broadband are widely available in Bahrain

Wireless technologies are now being used to deliver high-speed broadband communications giving access to the Internet for information research, social networks, videos, as well as providing opportunities for companies to promote their own services through online advertising. Broadband wireless technologies such as those being used by Batelco, Zain, Menatelecom, and VIVA will increase the efficiency of businesses by allowing consumers to be connected to telecommunications services anytime anywhere.

Between 2010 and 2011 the price of Broadband in Bahrain dropped by 40%, according to the 2011 Retail Price Benchmarking Study of Telecommunications Services in Arab Countries, a comparative study for telecommunications services in 22 member countries of the Arab Regulators Network.

Bahrain Factsheet March 2013

Household broadband penetration and Internet usage in Bahrain have been rising steadily. At the end of Q2 2012, there were approximately 413,000 internet subscribers in Bahrain, all of whom were broadband subscribers3.

Industry Leaders Choose Bahrain

Leading international ICT businesses choose to take advantage of Bahrains favourable business environment and base their Middle East enterprises in the Kingdom. Microsoft WIPRO, Tech Mahindra, Software AG, Netgear, Hewlett Packard, Zain (Vodafone), and Tata Consultancy Services all have offices in Bahrain.

Bahrains favourable conditions make the Kingdom an ideal place for companies to access the Gulf market. For example, in January 2010 Bahrain-based Viacloud, a telecoms provider focused on providing affordable, high quality voice services, signed a deal with T-Mobile UK to provide mobile telecom services in the UK.

In late 2012, VIVA Bahrain, the Kingdoms most innovative telecoms provider teamed up with an emerging company specialized in cutting-edge data analytics and interactive mobile visualization technology - iVEDiX, based in Rochester, New York. The partnership aims to support efforts towards increased customer engagement and satisfaction through data, business intelligence and analytical strategies.

In February 2012, Thinspace and Mantech Computers announced an exclusive partnership in order to accelerate the deployment of Cloud Client computing technology to enterprise customers in the Kingdom of Bahrain. The partnership also targets the whole of the GCC region.

In December 2012, Ospyn, an Indian Singaporean firm with a proven track record in major egovernance projects, signed a Memorandum of Understanding (MoU) at the MEET ICT BAHRAIN 2012 conference with Openinside, a Bahrain ICT provider. The MoU is focused around working together to support the provision and utilisation of open-source technologies, ahead of a potential joint venture being established in the future.

http://www.tra.org.bh/en/pdf/2012TelecommunicationsmarketsindicatorsvFforpublic.pdf

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In February 2013 YRfree Technologies, a World leader in mobile video streaming technology, appointed Mantech Computer Services, Bahrain, as their Distribution Partner for the GCC region.

Global Information Technology Report

For the third consecutive year, Bahrain remains in the top 30 economies as ranked by the World Economic Forums (WEF) Global Information Technology Report of 2012; the Kingdom is ranked 27 of 142 economies worldwide on the Network Readiness Index4. Bahrain is the highest climber of the Gulf nations over a three-year period, having gained 21 places since 2006.

Telecommunications Regulatory Authority

To facilitate competition and fair pricing, in 2002 Bahrain unbundled its local loop and moved away from only having one service provider in the country. Since 2003 the

Telecommunications Regulatory Authority (TRA) has issued 154 licences across ten segments.

The 2012 TRA Annual Report announced that the telecommunication sector revenue reached BD 406 million in 2011, with the sector experiencing a compound annual growth rate of 10% between 2006 and 2011. The number of mobile subscribers had risen to 1.9 million by the end of August 2012 which represents 158% of the population.

There are currently 2,700 employees working in the telecommunications sector, with 28% of employees being female. Between 2010 and 2011 there has been a 4.8% annual growth in the number of employees in the sector5.

http://www3.weforum.org/docs/Global_IT_Report_2012.pdf http://www3.weforum.org/docs/Global_IT_Report_2012.pdf

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Government Support
The Government of Bahrain has adopted a liberal approach towards Internet regulation and has invested heavily in the Kingdoms IT infrastructure and education.

The Government carries out a National Telecommunications Plan for the countrys telecommunications industry every three years. The plan sets out the governments policy and strategic direction for the telecommunications sector.

The Government is committed to developing IT. In April 2010, Bahrain hosted the first specialized GCC forum on e-training in the public sector. Government bodies in Bahrain and the GCC countries took part in the event, which was attended by more than 30 international experts.

In April 2012, Bahrain hosted the third Bahrain International eGovernment Forum, bringing together the brightest minds and the latest solutions in the eGovernment arena with a focus on the private sector. The forum was under the patronage of His Highness Shaikh Mohammed bin Mubarak Al Khalifa, Deputy Prime Minister, Chairman of the Supreme Committee for Information and Communication Technology (SCICT). Twenty four renowned speakers of specialists in the field of eGovernence and ICT took part in the Forum to convey their experience and share knowledge, which included South Korea, the United Kingdom, Estonia, Japan, Belgium, Turkey, Poland, the Netherlands, the United States of America, Germany, Colombia, in addition to the participation of international organizations such as the United Nations, the United Nations Development Programme UNDP, and the Internet Corporation for Assigned Names and Numbers ICANN.

In October 2010, the Bahrain eGovernment Authority (eGA) announced its plans to introduce its new e-Office project Zajil, aimed at enhancing difference government correspondences through the use of ICT in a safe environment for electronic communications. The project provides enhanced security options and confidentiality, as well as higher speed and effectiveness.

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Under the patronage of H.E. Shaikh Ahmed bin Atiyatallah Al Khalifa, former Minister of Cabinet Affairs, responsible for the Telecommunications sector at that time, the Telecommunications Regulatory Authority in partnership with Family Online Safety Institute (FOSI) held the Gulfs first online safety conference in April 2010

In October 2010 the Telecommunications Regulatory Authority published the results of the regions first nationwide study on online safety Roadmap for the Future that recommends steps that will insure a safer Internet for the kingdom.

Tamkeen
Tamkeen (formerly the Labour Fund) is an independent authority which formulates strategic and operational plans to invest in Bahraini employability. As of December 2011, Tamkeen has injected more than BD 166 million into the private sector through its programmes, targeting and benefiting more than 100,000 Bahrainis and enterprises.

Moreover, it has made in excess of BD 166 million available through its enterprise financing portfolio, and enabled over 3,000 Bahrainis to find employment, and more than 1,000 enterprises to participate in leading local, regional, and international trade fairs and exhibitions.

Tamkeen has a rich suite of support programmes targeting the ICT industry and adoption of ICT technology by the private sector. These include training, processes and equipment upgrades through the Enterprise Development Scheme's (EDS) Business Information Systems (BIS) support programme and support of the Bahraini ICT industry through its Growth Assistance Programme (GAP).

Key Telecoms Companies

Batelco, Zain and Viva are the three main players in Bahrains telecommunications market. Batelco was the first Middle East telecommunications company to receive ISO9002 certification from the British Standards Institute and has an alliance with Cable & Wireless.

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Bahrain Factsheet March 2013

Zain entered the Bahraini telecoms market in 2003, and in just two years, the companys net revenues more than tripled from $35m to $107m and it achieved a market share of 30%.

Established as one of the nationwide full service telecommunications operators, Menatelecom started operations in Bahrain in 2003. In January 2007, Menatelecom successfully implemented a Fixed Wireless Access (FWA) license that will allow the company to provide customers with the full range of fixed and nomadic telephony services. Partnering with Motorola, Menatelecom has rolled out its FWA network nationwide, deploying a world-class technology solution based on state-of-the-art WiMAX technology.

In March 2009, the Saudi Telecom Company (STC) Group obtained the 3rd mobile operator license in Bahrain. This led to the launch of VIVA Bahrain on March 2010. VIVA has invested $340 million in Bahrain's telecom sector, of which $100 million targets infrastructure development. VIVA Bahrain offers mobile and wireless broadband services and has established a fund worth $300 million with the aim of investing in the Bahraini economy and other GCC countries to drive innovation in ICT-related domains such as e-health, e-learning, e-banking, applications and e-commerce.

Huawei Technologies, a leading provider of telecommunications solutions worldwide opened its regional office in Bahrain in August 2009. The move signals the Chinese

companys intention to expand across the Middle East where it already has contracts worth over $3.3 billion and annual growth of more than 30 per cent.

E-Tendering Tamkeen and the Tender Board unveiled a new training initiative in August 2009 to promote e-Tendering, which trains companies on how to utilize the governments online tendering process. This e-Tendering system has most recently been adopted by the Ministry of Municipalities and Agriculture, which now accepts online applications for building and advertising permits from residents and investors in Bahrain. The next Ministry services planned to be made available online will be reclamation and digging applications.

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Bahrain Factsheet March 2013

Smartcards
In another regional first, Bahrain introduced smartcards in 2005. The cards serve as a combined ID card, driving licence and population registry card. They can be used for voting, electronic payments or as a valid travel document for journeys within the GCC.

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Bahrain Factsheet March 2013

Useful Links
Total Country Connectivity Measure report World Economic Forums (WEF) Global Information Technology Report http://www.arabadvisors.com/reports/ http://www3.weforum.org/docs/WEF_GITR_Report_2011.p df

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