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* Telecoms firm no longer needs approval to change consumer broadband prices
* Move comes after Batelco's market share plunges
* Restrictions remain for its business broadband customers
By Matt Smith
DUBAI, March 30 (Reuters) - Bahrain's Batelco will no longer need regulatory approval to change its consumer broadband prices, the island's industry watchdog said on Sunday, in a move that could help the former monopoly arrest a sustained drop in market share.
Bahrain has arguably the Gulf's most liberalized telecom sector, with three operators - Batelco, Zain Bahrain, a subsidiary of Kuwait's Zain, and Saudi Telecom Co affiliate Viva Bahrain - and about 10 internet service providers vying for customers among the island's 1.3 million residents.
Stiff competition led Batelco's share of retail broadband subscribers to fall to 20-30 percent in 2012 from 70-80 percent in 2008, according to findings from the Telecommunications Regulatory Authority (TRA).
This drop has now prompted the TRA to remove restrictions on Batelco's consumer broadband pricing, the regulator said in a statement.
Previously, tariff changes would require regulatory approval to prevent Batelco - formally Bahrain Telecommunications Co - offering anti-competitive pricing.
"We are recognizing that vigorous and sustainable competition has emerged in Bahrain which does not rely on regulated access," the TRA's General Director Mohamed Bubashait said in the statement.
Batelco, which has reported declining profits in 16 of the past 18 quarters, remains the dominant broadband provider for businesses, with a 60-70 percent revenue share, and so the TRA will continue to regulate Batelco's prices for this segment, it added.
Batelco did not immediately respond to requests for comment. (Reporting by Matt Smith; Editing by John Stonestreet)