Bahrain Pins Digital Leader Hopes On New Telecoms Innovation License

Having pioneered one of the Middle East and North Africa (MENA) region’s first FinTech regulatory sandboxes, the Gulf state of Bahrain has recently moved to introduce a similar initiative for the telecommunications sector.

Holders of the new telecoms Innovation License, launched by the country’s Telecommunications Regulatory Authority’s (TRA), will be able to carry out live trials of emerging technologies in a relaxed regulatory environment with accelerated access to Bahrain’s radio spectrum.

As well as allowing businesses to evaluate new products’ market acceptance, the regulatory sandbox in telecommunications will also create an important channel for dialogue between the private sector, organizations across the telecommunications industry and the TRA.

According to TRA’s General Director Philip Marnick, the authority believes “innovation is the key to maintaining leadership in the digital space” and the new license will “encourage companies, universities and other stakeholders to test and trial new wireless technologies and services in Bahrain […].”

Since the U.K. launched the first FinTech regulatory sandbox in 2016, the idea of creating an environment within which businesses can experiment with novel ideas has gained traction around the world and is increasingly being employed beyond the realm of financial technology.

Related: Inside the UK’s Regulatory Sandbox: How It Fosters FinTech Innovation, Drives Multisector Growth

In addition to Bahrain, other countries in the Gulf Cooperation Council (GCC) region have also launched FinTech sandboxes. Central banks in Kuwait, Saudi Arabia and the United Arab Emirates (UAE) have all enabled exploratory regulatory environments while the Central Bank of Oman has added the item to its to-do list.

Saudi Arabia has gone a step further and expanded the concept beyond the remit of the central bank’s regulations, launching the Capital Markets Authority (CMA) FinTech Lab, a regulatory sandbox for securities markets.

Learn more: The Saudi Sandbox Revolution: How Experimentation Is Driving Innovation in the KSA

Lessons From Those Who Went Before

Colombia is considered the first country to have used the sandbox approach to promote innovation in the provision of telecommunications services.

And for an indication as to the kinds of ideas that can be expected to be tested under Bahrain’s Innovation License, it is worth considering the three participants of the first wave of Colombia’s telecoms sandbox, launched last year.

These include a rural internet project involving 4G open RAN cellular mobile coverage by Telefónica; another initiative by the same operator to investigate the feasibility of a platform for assessing mobile Internet user experiences; and Colombia Móvil’s (Tigo) exploration of “convergent contracts”, which aim to combine fixed and mobile telecoms into a single service contract.

Recipients of the Innovation License can also look to graduates of Bahrain’s FinTech sandbox for inspiration. Among these are some of the country’s most successful tech startups in recent years, including crypto exchange Rain and open banking company Tarabut Gateway.

Read more: PYMNTS GCC Series: Bahrain Drives Open Banking Adoption in MENA

In an interview with PYMNTS, Tarabut Gateway’s chief product officer, Nino Ocampo, said that “progressive regulators” can make all the difference for the success of new technologies like open banking, citing authorities in Bahrain, Saudi Arabia and the UAE as particularly forward-thinking in driving innovation forward.

Watch Ocampo’s interview: As MENA FIs Adopt Open Banking, EU’s Mistakes Loom Large

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