Batelco is to gradually outsource its non-core operations to save on costs and increase core area efficiency, it was revealed yesterday.

Company group chief executive Peter Kaliaropoulos said, however, the company will maintain outsourcing to a certain level so as to not harm overall profitability.

"We have learnt from some of our operations overseas where there is a lot of emphasis on outsourcing," Kaliaropoulos said during a Press conference at the company's Hamala headquarters.

"We have already outsourced installation and repair of fixed line telephones in some of Bahrain's areas and are looking at other things."

He said these could include erection of phone masts and managing information technology systems.

"Core areas like customer services and retail shops will, however, continue to be managed by Batelco staff."

He said while these steps would help reduce costs and overheads, they would also mean more efficiency for the company.

"Selective outsourcing will always help," he added.

Kaliaropoulos' remarks came as Batelco on Wednesday reported its investment in S Tel (India), in which the company holds a 42.7 per cent stake, combined with stiffer competition in the home market saw the group suffer a slip in profit last year.

Chairman Shaikh Hamad bin Abdulla Al Khalifa announced that the group had posted gross revenues which were steady at BD340.3 million ($902.7m) and net profit of BD86.8m, a 17.4pc decline over 2009.

He said that while the Batelco Group ended 2010 with a customer base of 9.2 million subscribers across its seven operating markets, its annual financial results were affected by the decline of market share in Bahrain and by its share of expected losses for its start-up Indian operation.

Kaliaropoulos said 2010 had been the toughest year for the company in a while but said he was confident the situation would become better in the time to come.

"Our start-up operations in India will start to make money in the next few years and that will make a difference."

He said with a new entrant into the Bahrain telecoms market, competition had increased and that was affecting the company's bottom line.

"In spite of all the issues, we are still market leaders in mobile, mobile broadband and fixed broadband services. "This is an encouraging sign," he added.

Kaliaropoulos said the company is not looking at buying new licences overseas to start operations.

"However, we are looking, and will continue to look, at acquisitions of existing companies that will make commercial sense, wherever in the world these are."

He said Batelco had maintained its dominant position in the Bahrain market, even though it had lost customers.

"We have, in the last year, lost only the low-spending customers and held on to those who pay more. This has affected us but we want to make up by offering even better services to those who remained with us."

He said Batelco would gradually start to replace its "copper" cabling with fibre optics because it cost incrementally less.

"Simply going fibre by replacing all copper will be an unwise thing to do but wherever we need to replace, we will do so with fibre."

Kaliaropoulos said the impending mobile number portability will affect the company. "When people are allowed to change numbers without changing operators, there is bound to be an impact," he added. - TradeArabia News Service