The former monopoly made a second-quarter net profit of 20.6 million dinars ($54.66 million), according to Reuters calculations, down from 23.2 million dinars in the year-earlier period.
Two analysts polled by Reuters had expected the firm to post a quarterly profit of between 17 million dinars and 18.80 million dinars.
Batelco made a half-year net profit of 38.8 million dinars. Gross revenues were 163.2 million dinars, down 4 percent from a year earlier, it said in a statement.
Batelco is one of the smaller telecoms operators in the Gulf Arab region with a home market of about 1.2 million people in which it faces rising competition from bigger rivals Kuwait's Zain and Saudi Telecom Co. (STC).
"Mobile and broadband operators in Bahrain continue to add new customers; however, revenues per customer are declining whilst costs to acquire and retain customers are growing," said Chief Executive Peter Kaliaropoulos.
"In a highly penetrated market for mobiles and broadband with three mobile operators, this is a natural competitive consequence."
This squeeze has pushed Batelco to expand overseas, with foreign operations accounting for 37 percent of revenues in the first-half of 2011.
Batelco and Kingdom Holding have signed a non-binding term sheet with Zain Saudi as part of their $950 million purchase of a quarter-stake in the operator, the bidders said on Wednesday.
"We remain debt free and in a strong position to raise funds for future expansion of our group," added Kaliaropoulos.
