SEEF DISTRICT, Bahrain, 30 December 2003 — The Kingdom of Bahrain entered the brave new world of third-generation (3G) mobile communications with the commercial launch of MTC-Vodafone’s services on Sunday night. Dignitaries joined MTC-Vodafone Chairman, Sheikh Ahmed ibn Ali ibn Abdullah Al-Khalifa and other MTC-Vodafone executives at the MTC-Vodafone Mobile Fair, near Seef Mall, for the ceremonial first phone call on Bahrain’s MTC-Vodafone network and then a demonstration of the company’s 2.5 and 3G mobile technologies.

“I am delighted to mark the beginning of a new phase in telecommunications across the Middle East. Bahrain is the main communications hub for the region and it is right that we should be effecting and starting such a change from here,” said Sheikh Ahmed.

The license for Bahrain’s second mobile network was awarded in April 2003. MTC-Vodafone signed its first suppliers‚ contracts in July 2003. Over the next five and one-half months the network was built. On Dec. 15 MTC-Vodafone had a soft launch of the network for “friendly users,” in part to trounce Emirates Telecommunications Corporation-Etisalat and collect on the claim to be the first telecom with 3G services in the Middle East.

MTC-Vodafone will now go head to head with Bahrain’s first telecom provider, Batelco. Sniping between the two firms has been ongoing for months and full-scale combat appears to be nearly under way. This most likely will be to the benefit of Bahrain’s consumers. Some locations in Bahrain are already covered with competing advertisements from the two firms. On Sunday, Bahraini newspapers carried ads touting Batelco’s new mobile packages and reduced rates including Freetime packages for Bahrain University students that include free talk time and free SMS messages.

“We welcome the opportunity to compete with Batelco,” said Dr. Saad Al-Barrak, director general, MTC-Vodafone. “We know that we are not only ahead of Batelco, we are way ahead. We have overwhelming richness in the breadth of our network and services and our value for money. We want to be competitive not only in Bahrain, but with the telecom giants of the world.”

“My brothers and sisters in Batelco are confused and probably afraid,” Al-Barrak added. “Their reactions so far are understood and appreciated. We have accepted terms, which were not fair and added to our cost, just to proceed forward. As a new start up with a new high-speed network, we believe that Batelco should pay much more to us then we pay to them for the network interconnection, but they are paying only slightly more.”

“However,” he continued, “I wish to thank Batelco for listening and being cooperative. I hope to cooperate more and more with them for the benefit of the community. It is difficult for a Bedouin like me to compete with a world-renown company such as Batelco, but I am up to the challenge. Batelco’s new ads read, ‘Your number one choice.’ I thank Batelco for recognizing that now people in Bahrain have a choice.”

Mobile Telecommunications Company (MTC), a GCC regional company, was founded in Kuwait in 1983. After privatization in 2001, the company entered a partnership with Vodafone in 2002. MTC-Vodafone claims to have three hundred million subscribers in 28 countries. By 2011 the company plans to evolve into a global provider with subscribers on every continent.

MTC-Vodafone (Bahrain) now employs 204 people and under their commitment to Bahrainization they are already at the 82 percent level. This is seven percent over their original declared threshold and two years ahead of their agreement with Bahrain’s Telecommunications Regulatory Authority (TRA). They have met their commitment under the original licensing terms to launch service by end of December 2003. Forty percent of the company’s shareholders are Bahraini. According to Khalid Al-Farkh, chief operating officer, MTC-Vodafone (Bahrain), the company has planned a total investment in the Bahraini market of $120 million over three years.

MTC-Vodafone executives stated repeatedly in press conferences and other presentations leading up to the launch that their corporate focus is on “customer delight.” They believe that the combination of an excellent network and outstanding customer service will be more than enough to bring them over 100,000 subscribers in the first year, as predicted by their director general.

Services for MTC-Vodafone will be offered through MTC-Vodafone Experience Outlets. The first seven outlet locations are: Bahrain International Airport Arrivals Lounge, Muharraq Sport Club, Al-Hoora Commercial Center, Manama Chamber of Commerce Building, Isa Town Hall, Souq Waqif and Budaiya Commercial Center. MTC-Vodafone services are divided into three different categories: the prepaid eeZee, the postpaid Hewar and Business. All categories include the “World of WoW” which is a complete offering of data services including short message service (SMS), multimedia messaging service (MMS), Web2SMS and Web2MMS, mobile chatting and instant messaging, news channels, games, downloads, entertainment, mobile banking and e-mail.

Throughout Bahrain, the MTC-Vodafone network supports GPRS at 30-40 Kbps and EDGE at up to 120 Kbps. 3G, with data speeds reaching up to 300 Kbps, will initially be available at the Bahrain University Campus, the Diplomatic Area and Al-Seef District.

“We are professional businessmen. We have done our homework and we believe 3G is the future of mobile communication,” said Al-Farkh. “3G is much more reliable and 3G networks are less costly to maintain. Additionally, the cost of the technology is sure to come down over time. Basically the success of 3G will be linked to the applications and content that is available. We are already demonstrating applications such as video streaming, audio streaming and camera surveillance. We believe that the business community will be the first to adopt 3G due to their need for higher bandwidth and we believe that they will be willing to pay the price for it.”

Interestingly, MTC-Vodafone operators are not yet offering 3G in the other Middle East markets they serve, in particular Jordan and Kuwait, where they have nearly 2 million subscribers. Al-Farkh claimed that they were eager to do so and that the lack of approval from the respective governments was the only inhibiting factor. Also interesting is that Bahrain’s MTC-Vodafone network is not currently subject to any censorship.

“For the time being, we are in discussion with the relevant authorities on this issue,” said Al-Farkh. “There is no actual requirement for any censorship but we will do whatever is necessary for the benefit of our customers. We believe in freedom of choice for consumers but if this freedom impacts on the rights of others, then we must protect their rights.”

Speaking of MTC-Vodafone’s future interaction with consumers from the Saudi market, Al-Farkh first of all wanted Saudi Telecom Company (STC) subscribers to know that they can already roam on the MTC-Vodafone network. The company is also in talks with STC to conclude a deal providing preferential rates and services for STC subscribers with all operators in the MTC-Vodafone group.

“The STC roaming deal was the first that we concluded because we want to offer the best services to Saudi consumers,” Al-Farkh commented. “We also encourage those individuals visiting Bahrain from Saudi Arabia to try our prepaid service or buy a special number on our network. This will enable them to experience the benefits of our excellent service offerings. Saudi Arabia is a nation dear to our hearts. We are very interested in entering the bid for the second Saudi mobile license. It is a big market with much potential. In 2004, we look forward to bidding and winning the new Saudi mobile license.”

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