Introduction

The telecommunication industry plays a vital role in Bahrain. Telecommunications started in Bahrain with telegrams and telephony services in 1931 cable and wireless of UK (Batelco Group, 2011). Batelco was established in 1981 started to supply local residents with the telecommunication services. After years the government allowed other firms to be established in Bahrain and the TRA exited back then in 2002 to control the market prices and protect consumers interests (TRA, 2004). Telecoms are highly important in Bahrain because of the wide range of using technologies in every sector. Bahrain is an important financial and commercial center in the Middle East and the connection between the west and the east in the aviation sector. Nowadays, the development in the real state has viewed a big jump towards modern civilization made the investors focus on Bahrain as a growing financial kingdom. Which makes the communication technology development is very essential. Having world biggest sports events such as F1 and Olympic games also constitute an importance to have the latest telecommunication technology as well as the international media center to broadcast to the entire world.

Theory application and analyzing

Porter’s five forces model

1. Threat of new entrance:
Interring the telecommunication market in Bahrain has a high threat because there are many competitive firms that people could go for instead of the new company. To inter the telecommunication market the companies first have regulation licenses from the TRA and accept their terms and conditions and other circumstances (TRA, 2004). The capital can make the barrier of entrance high as the new company must have huge capital to compete with others and reach their level. They should have similar advanced technologies and promotion. They have to do a fair feasibility study of the market and study the market demand to know what products and services are the consumer are willing to buy. 2. Rivalry (competition):
The competitive telecommunication companies in Bahrain are as follow: * Batelco * Zain * Menatelecom * Viva
The first telecommunication company in Bahrain was Batelco. It was established in 1864(Batelco Group, 2011). It had all the market power and price making with no competitors and no controlling. After years of Batelco’s monopoly, new company occurs and it called Zain. It is the first mobile company in the Middle East and it was first established in Kuwait in 1983 (Zain Bahrain, 2011) and by the years it has expended to other countries. There theme is a wonderful world so their promotion campaign in Bahrain back in 2003 was pretty magnificent. Their logos were everywhere in the streets, malls, newspaper and they have make people curious whether their company could compete with Batelco after those many years. Minatelecom also has entered Bahrain’s market on January 2007 and it’s providing nomadic and fixed telecommunication services to satisfy all the customer’s needs (Minatelecom, 2011). After three years viva joined the market on March 2009 with an amazing offers that attracted consumers to Viva because of their smart strategies. It is a Saudi company and it has branches in 9 countries: Kuwait, Bahrain, Indonesia, Lebanon, Jordan, Malaysia, Turkey, and South Africa (Viva, 2011).

3. Power of buyers:

The power that consumer have is the power of buyers. It means the larger the consumer buy the more power they have. For example, if the buyer purchases the products in a large quantities then he have a high buying power. If he stopped purchasing for a reason then he will threaten the company. Another thing is the other choices that the consumer has in the market makes his buying power are high. For instance, here in Bahrain there are many broadband providers so that if the company raised their prices the consumer can change the broadband to another company and save his money.

4. Power of supplier:
It is about the source of the devices and services that the telecom company deals with and if the telecom company has many suppliers they will not be threaten if one supplier stopped their deal. In this case the power of supplier would be low because of multi suppliers. Also, if there were no other suppliers the power of suppliers will be high for example Minatelecom’s supplier is Motorola and it provides Mina with the WIMAX service and other services. If Motorola decided to discontinue their service then minatelecom will in trouble since they are the only supplier and they have no substitution. On the other hand the supplier of the electricity is a government entity and has a high power because there is no substitute and it’s the only company in Bahrain that provides us with electricity. The company would not be able to serve consumer if there was no electricity because know the telecommunication is all about electricity.

5. Threat of substitutes:

The substitute is using services which cost less and have more demand than the conventional service. For example, people now are using voice calls and video calls through particular sites that can provide it for free as long as the consumer has an internet connection such as Skype, msn yahoo and many others. It could cost much lower than the conventional mobile voice calls. Nowadays, companies are making sure that the phone supports Skype and have cameras to enable consumers to have video calls. All the mentioned above makes the threat very high for the telecommunication companies.
Furthermore cheaper alternatives make the risk of substitutes rising. For instance, if two companies like viva and Batelco are selling the same product for example blackberry and one of them are cheaper than the other then the consumer certainly will go for the cheaper and it will be consider as a substitute of the other company. Another thing is letters can be a substitute for the telecom so people can send a letter instead of sending an email. Although letters are now something from the past but it seems more convincing and more appropriate for some occasions and sounds more powerful than an email.

Pest analysis:

1. Political: first of all the employment be applied according to the private sector of Bahrain’s labor low and any terms that does not obey with laws will not be accepted or applied (Bahrain labor law, 1976).
Before starting the business the applicant must go to the ministry of labor and get an agreement for the business. Then license must be requested and it has to meet the requirement of the telecommunication law of the kingdom of Bahrain and to be under the TRA regulations and conditions.
Another thing is it must not affect the environment (TRA, 2004). For example transceiver communication tower they do compensation for space rental on the roof of the house or building but they discovered that there is side effect because of wave radiation which could harm people’s health that is living around the tower.

2. Economical:
Economic growth or decline can affect the companies in many ways. For example, if the economy growth it means the environment is perfect to raise the competitors’ numbers. This means more opportunity for new businesses to start operating in Bahrain. But if the economy of Bahrain decline it will keep the investors away because people’s wages would be low and they might not be able to afford the cost of telecommunication.
Bahrain is a developed country and their people in all ages are willing to buy mobiles and other products and services. The demand on technological telecommunication is very high because of the huge usage which leads and allows new competitors to enter and offers their services.
The employees’ wages must be fair and starting a new company means it will solve the unemployed people and it will give them chance to get appropriate jobs. 3. Social:
The demographic is an important factor. Bahrainis people in all ages own a telecom device for both genders males and females. Moreover, Bahrain ’s schools and universities mainly depends on the internet researches which push the student to ask their parents for telecommunications devices like laptops and internet broadband. Which leads to having an internet broadband in nearly every house has changed the demographic in the kingdom of Bahrain.
The people’s income let them to choose the suitable package that suits their salaries so companies should provide several of choices so the consumer could choose from. Also the location is an important element that the new company must think of the location of their branches and it must be located in a place that can grab people’s attention.
Another thing is the company must make sure that the employee’s attitude is more than acceptable with the clients because it reflects the company’s name and Bahrain is a small country and the news speared very fast so it will affect their reputation.

4. Technological:
Earlier, the dial-up connection was used and it was very slow, so when you are using the internet the phone line gets a busy signal. By that you are only allowed to use either the internet or the phone line. Nowadays, new technologies occur to solve the problem of the telecommunications and they invented the internet broadband which enables the user to use both the phone line and the internet. Also comparing the speed now with the previous dial-up, it is much faster now and some companies provide an unlimited downloading like Viva. The charges are much lower because earlier the charge depends on the duration of consumer’s usage, but now it’s on continuously and the consumer has to pay monthly fees.
Lately, technologies are being used in everything. Today people can have internet everywhere with them using the new technology of the broadband and WIMAX like the one that viva and Minatelecom provides. Conference can be set by the internet using the webcams and microphones. It had unified the world and what’s happening in USA for example takes only minutes from us to know about. Technology has safe time. Earlier, people use to write letters and wait for their replays for days or weeks especially that Bahrain is an island and it takes more time to deliver a letter for a far country. Also for surgeries doctors can be on video com in theater while consulting doctors from different countries during a critical surgical operation with no need for the consultants to travel all the way to the theater where the operation is going on.
It has also save energy for example the manager can call his secretary by phone rather than calling her and she can listen to his instructions in her place instead of going to his office every once and a while.
Also, technology helped westerns to read about Bahrain through the internet and discover Bahrain’s culture and it helped them for making reservation for hotels, cars, tours and many other important things that might risk their trip.
Telecommunication connects Bahrainis with each other’s by the blackberries, iPhones, and msn messenger. It makes the relationship between them stronger and easy to reach.

Finding and recommendation

To summarize, telecommunication is an important industry in Bahrain and people can’t live without it. Entering Bahrain’s market is not a hard task, if the investor has the capital and the resources he will be able to start his new telecommunication company. The circumstance in Bahrain encourages investors because most of the Bahrainis are highly educated and they live daily on telecommunication.

New telecommunication companies are advised to get involved in Bahrain’s telecommunication market for many reasons. First of all Bahrain’s companies are under TRA’s control and by doing so no one can manipulate the prices and services so the new company and the consumer will be safe in terms of prices.

Secondly, the capital is the most important thing because the competition in Bahrain’s telecommunication is pretty high so the new company needs to be in a way better than the existing ones by providing the latest advanced technological devices and do an enormous marketing campaign which make everyone in Bahrain hear about it.

Thirdly will be the market research. To start a new business it is important to be aware of other competitors around in Bahrain and have an idea about their prices and services so to manage competing with them.

Fourth, Bahraini people have a high demand on telecommunication and they welcome any new successful technologies, so they do not hastate to purchase it. That’s why it’s a winning business to trade with technologies in Bahrain and people are addicted to those kinds of devices in all ages like the blackberry, iPhone and iPad. Once they know about a new device in the market they go ask about and get one.

Fifth, the announcement about the new company and mentioning that the employees will be from local people can encourage people to know more about the company. By employing local people the company will gain their trust and people will start talking and the word of mouth is the most powerful communication to pass information specially that Bahrain is a small country and the news spread rapidly. If the employee is Bahraini people surrounding him will start trusting him and they will start to ask about the company’s offers and services.

Sixth, the new company should try to get involved in charities and social events to win people’s attention through their emotions. For example, set up programs for youth so they can be attracted to the company because most telecoms users are young people. Another example is to sponsor a famous sports event in order to enhance the people knowledge about the services provided by the company.

References

Bahrain labor law (1976 ) The Labour Law for the Private Sector. Retrieved on 2011 from http://www.scribd.com/doc/33006664/Bahrain-Labour-Law

Batelco Group(n.d.). history. Retrieved on 2011 from http://www.batelcogroup.com/portal/en/31/history.aspx

Minatelecom(n.d.). about us. Retrieved on 2011 from http://www.menatelecom.com/AboutUs.asp

Telecommunication regularity authority (n.d.). Licensing. Retrieved on 2004 from http://www.tra.org.bh/en/LicensingApply.asp

Viva Bahrain (n.d.). Overview. Retrieved on 2011 from http://www.viva.com.bh/static/CorporatePortal/English/CorporateInformation/Overview/index.htm

Zain (n.d.). our brand. Retrieved on 2011 from http://www.zain.com/muse/obj/lang.default/portal.view/content/About%20us/Overview/Brand

Zain Bahrain (n.d.). ZAIN BAHRAIN & THE COMMUNITY retrieved on 2011 from http://www.bh.zain.com/portal/page/portal/AboutUs/aboutUs