Bahrain to Review Impact of Unfair Competition from OTT Apps
Published on: 19th Mar 2014
By: Ian Mansfield
Bahrain's telecoms regulator is calling for a review of the regulations covering OTT type services over concerns that they may be offering "unfair" competition to the incumbent telcos.
The TRA said that OTT messaging apps, such as Viber, WhatsApp and Skype are raising competition against the traditional telecoms networks. It has published a study which found that the OTT providers are eating into the profits at the mobile networks, and calls for a review of price regulations set by the government.
The report suggests that in a conventional unregulated market, companies would respond to the arrival of new lower cost competitors, but this has not happened in the telco market, because prices are too tightly controlled.
The regulations slow the ability of the mobile networks to respond to price competition, the report concluded.
It described competition from free service providers as "unfair" and the reason for what it described as market "malfunction".
The report also concluded that the OTT vendors own business models were not sustainable either, and were being supported by investors and high stock market valuations rather than a sound commercial basis.
It did not call for the services to be restricted though.