Page 324 - Bahrain Gov annual reports(V)_Neat

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TELEPHONE SERVICE

On 1st January, 1955, Cable and Wireless Ltd., the Company which installed the automatic
telephone service in Manama and Muharraq in March, 1949, announced to the public that as
from 1st April the existing charges, both rentals and call charges, would be increased. The
increases were in the neighbourhood of 100 per cent. The rates had not been changed since
1951 when an increase was finally agreed to after considerable opposition from the public and
lengthy negotiations. The Company claimed that it had been consistently running the under­
taking at a loss and it was not prepared to continue losing money in Bahrain. The public
however, associated the telephone undertaking with the Cable and Wireless which they believed
was a very prosperous business.

The matter was taken up by a group of members of the Chamber of Commerce who very
soon obtained the support of all the members and of many non-members who objected to
being asked to pay anything more for what they already had. The Secretary of the Chamber
of Commerce issued a circular which recommended subscribers to boycott the telephone service,
when the time for renewals became due. As is usual in Bahrain when a few strong minded
persons take the lead then all the others follow.
The total number of exchange lines was 940. At the end of March 338 subscribers, involv­
ing 475 telephones, gave up their telephones. Foreign firms and government offices took no
part in the boycott and some of the Arab firms who possessed a number of lines privately
retained one telephone.

The Chamber of Commerce then began to consider various schemes such as the formation
of a local company to instal and run a new telephone service. They decided not to make any
arrangement with Cable and Wireless Ltd., and not to consider buying the existing telephone
undertaking. They urged the government to nationalise both the telephone service and the
cable and wireless service, but this the government declined to consider.
Negotiations between the government and the Company and the Chamber of Commerce
drifted on and in the meantime the merchants suffered a great deal of inconvenience not only
because they could put through no local calls but because it was difficult to put through calls to
places abroad.
The Government offered to subsidise the undertaking to the extent of half an Anna for
each call, the public paying \\ Annas. This offer was refused by the Chamber of Commerce.
Negotiations continued and the subscribers offered to accept, for one year, the higher rentals,
Rs. 210/- instead of Rs. 172/- per annum provided that there was no change in call fees, but
the Company was unable to agree to this.

Eventually, in the middle of July, His Highness, in order to put an end to the deadlock
agreed to subsidise the Company, for the period of 12 months, to the extent of £10,000 provided
that the proposed charge for calls was reduced by one Anna per call, the rentals to remain as
proposed by the Company. A notice to this effect was published on 14th July and the partial
suspension of the telephone service came to an end.
This dispute between local telephone subscribers and a foreign Company was at times
extremely acrimonious. The telephone users were convinced that the proposed charges for
Bahrain were higher than those elsewhere, the Government refused the suggestion of the
Chamber of Commerce that it should take over the whole undertaking and the Company was
equally determined not to continue losing money over the Bahrain telephone service. It remains
to be seen what further developments will ensue when the twelve months subsidy period comes
to an end.