Bahrain looks to expand ICT sector

Published June 24th, 2010 - 09:34 GMT

Bahrain has one of the most diversified economies of the six Gulf Cooperation Council members (GCC), with

mining and quarrying of energy producing materials accounting for 27.4% of GDP in 2009, compared to rates above

50% in Qatar, Saudi Arabia and Kuwait. Investment in Information and Communications Technology is a key part

of the Bahraini government's bid to become a financial hub, and will contribute to the country's social and economic


relatively diverse economy helped the country weather the 2008-2009 global economic crisis and real GDP

growth is expected to rebound to 5.0% by 2012;

Although Bahrain's real GDP growth dropped from 8.1% in 2007 to 6.1% in 2008 to a low of 2.9% in 2009, the•

important in improving the services sector, and business and financial service companies are generally the main

purchasers of ICT equipment. Bahrain has also developed a strong financial intermediation sector that

contributed 17.8% of GDP in 2009;

Services accounted for 36.0% of Bahraini GDP in 2009, the highest figure in the GCC. ICT infrastructure is•

million in 2009. Over this period total telecommunications revenues increased from BHD228.0 million to

BHD321.6 million.

Capital investment in telecommunications in Bahrain increased from BHD30.3 million in 2004 to BHD45.5Chart 1 Consumer expenditure on communication and total telecommunications revenues in

Bahrain: 2004-2009

BHD million

Source: Euromonitor International from trade sources/National statistical offices/OECD/Eurostat


personal computer in 2009, compared to the next highest rate of 74.4% in Qatar. Although Bahrain has the

second highest level of broadband penetration in the GCC, only 26.7% of households had broadband Internet

enabled computers in 2009;

This has helped to create a tech-savvy population. Bahrain led the GCC with 94.6% of households possessing a•

telecommunications monopoly in 2002, giving other operators the opportunity to apply for licenses for the

provision of mobile and broadband services. However, Batelco still commands 74.5% of the broadband market

in 2010, and this lack of competition will likely keep prices high for consumers;

High prices have hindered the greater availability of broadband Internet at home. Bahrain dismantled Batelco'sChart 2 Household possession of broadband Internet enabled computers and broadband Internet

subscriptions in Bahrain: 2009-2014

% of households/ number of subscribers

Source: Euromonitor International from trade sources/national statistics

of gathering market intelligence, and has been found to increase employment;

Broadband Internet penetration helps to increase productivity and innovation for businesses by lowering the cost•

communicate internationally with business partners and customers. Consumers can use this technology to keep

in touch with family and friends abroad, helping to increase the sales of internet-based services and telephony

hardware that utilise VoIP;

Broadband access also permits business and consumers to use Voice-over-Internet Protocol (VoIP) to•

UN E-government development index from 42nd in 2008 to 13th place of 192 countries in 2010. The

government appears to be making broadband Internet access part of its growth strategy and has earmarked

BHD30 million to finish putting government services online under the umbrella of the eGovernment Authority.

The Government of Bahrain has also made strides in developing e-government infrastructure, moving up thePROSPECTS

million by 2020;

Bahrain's growth potential is limited by its small population of 1.2 million in 2009, but is forecast to reach 2.0•

from 26.7% to 73.9% of households. This higher penetration will increase the demand for Internet-related

services, with an estimated market of 170,000 broadband Internet subscribers by 2020;

From 2009 to 2020, possession of a broadband Internet enabled computers is forecast to increase dramatically•

offices to Bahrain. In the first half of 2010, both CNBC and Deloitte chose Bahrain as the location for new

offices, highlighting the potential for Bahrain to develop into a media and financial hub for the Gulf

The development of an extensive ICT infrastructure will also help to attract businesses to locate their regional 

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