India too crowded for Bahrain group

Bahrain Telecommunication Company, also known as Batelco, is said to be beating a retreat from India. But the company is also facing trouble at home, analysts said.

Bahrain Telecommunications, known as Batelco, may become the latest telecoms operator to scale back its exposure to India amid heavy competition.
Batelco entered the country, the world's second most populous, only two years ago. The company is in talks to sell up to 30 per cent of S Tel, a joint venture, The Wall Street Journal reported on Wednesday.
Batelco's stocks were flat in trading on the Bahrain Bourse yesterday, having fallen 21.5 per cent so far this year to 0.40 dinars a share.
By contrast, the Bahrain Bourse All Share Index has fallen 11.8 per cent to 1,263.20 points during the same period.
Batelco bought its stake in S Tel in 2009 in an effort to tap into the north of the country where penetration of mobile phones is low.
However, although Batelco may be able to free up funds in India to better target opportunities elsewhere, it is not merely trouble in the subcontinent that should unnerve investors.
Due diligence on a joint bid with Kingdom Holding for Zain Saudi was also expected to be completed by last month, but there has been no further announcement.
Batelco's net profits fell 4.6 per cent in the second quarter to 21.3 million dinars, with revenues also declining despite an improved subscriber base for mobile services and wireless broadband.
Its price-to-earnings ratio is cheaper than Gulf rivals such as du or Qtel, but that must be balanced by the company's warnings in February that it expects revenues and profits to fall this year, largely driven by the start-up costs of S Tel.
Bahrain's telecoms regulator also said it had issued notices to Batelco and Viva, a unit of Saudi Telecom, accusing them of anti-competitive pricing on international calls to Asia, Reuters reported.
The two operators have until October 13 to respond to Bahrain's Telecoms Regulatory Authority. Batelco said yesterday it would contest the regulator's charge
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