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Issues of telecommunications may have many similarities the world over—everyone wants quality service at inexpensive rates—but in many places, various cultural mores step in, as do issues of the rules as a whole. Bahrain is just one such place where the rules telecoms must abide by are coming under a bit of a challenge, and based on reports from the Gulf Daily News, the top telecom regulators in Bahrain are urging that the rules be reconsidered in light of changing conditions.

The rule changes in question, suggested by Bahrain's Telecommunications Regulatory Authority (TRA), focus on an issue that many other communications regulators have been studying for years: the issue of products like WhatsApp and Skype (News - Alert)—among several others—that essentially allow users to make voice and even video calls between members at no charge, and at low cost to users outside the tools' networks. These new services are posing a particular struggle for established telecom firms in the region like Batelco, VIVA, and Zain (News - Alert).

The TRA put together a study, along with Detecon Consulting, which showed a point that was comparatively common in several markets: indeed, products that allow for free communications services are cutting into network operators' profits. But rather than banning the products in question, the study recommends instead that the government's price regulations on the telecom providers be reexamined. That could, in turn, mean good news for customers as prices could go down in order to allow the telecom providers in question better ability to compete with such services. However, it's also been acknowledged that such a development could cause prices to go on the rise as well.

Essentially, the report notes that the entry of over-the-top (OTT) providers has fundamentally changed the situation for network operators. In a “functional market,” as the report describes, the firms would then change the business model accordingly and continue to run. Some losses may be taken on the various sides, but as a whole, the market would reach a new balance with the OTT providers in play. But since that's not happening—at least, not as far as the TRA can tell—the TRA thus concludes that there “must be market imperfections.” In this case, the “market imperfections” causing “malfunction” in the market are the free service providers, which are providing a level of free service that, in turn, is proving to be “unfair” competition. The TRA notes further, however, that the free services should not be banned, as in a functional market such moves “...should absolutely not be necessary.”

On a certain level, the TRA has a point. Expecting services that charge a fee to compete with services that don't charge a fee is a bizarre proposition. Unless the charging services can offer a level of service that the free services can't begin to approach, most will accept diminished service in exchange for it being available at no cost. As such, there have to be changes in the market to allow the charging services to freely compete, and when there are issues of government restriction involved in pricing, that hampers that ability. The TRA's recommendation to revisit rules around communications services really only makes sense given the overall environment.

Only time will tell how the whole thing comes out. But it's clear that the TRA is making some simple, common-sense suggestions on improving the overall communications market, and that should make the real winners here those who use such services in the Bahrain market.