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Bahrain sets telcos' capital cost at 9.5pc

Manama, November 7, 2012

The Telecommunications Regulatory Authority (TRA) said it has proposed to set the cost of capital for regulated telecommunications services in Bahrain at 9.5 per cent.

TRA said the cost of capital is an important parameter that affects the cost base of operators and ultimately the price paid by consumers for telecommunications services in Bahrain.

It represents the return that investors are able to earn on capital employed in the provision of regulated telecommunications services in the Kingdom.

After a review of the cost of capital, TRA has proposed to keep the rate of return applicable to regulated telecommunications services in Bahrain at 9.5 per cent.

TRA said it has examined the changes that have occurred since the telecom regulator last set the cost of capital in 2009 as per international best practice, the latest available market information, regulatory precedents and the current economic environment.

Although the proposed cost of capital is unchanged from the level set in 2009, a number of parameters upon which the cost of capital is based have changed, and these are reflected in the draft determination, said the TRA.

In its report, TRA maintained that the proposed rate continues to provide the right investment incentives while preventing excessive profits.

TRA has also called upon interested parties to submit on the draft determination, with submissions due by 4pm on December 6 2012.-TradeArabia News Service

Tags: Bahrain | Telecom | TRA | capital |

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