DUBAI, (Reuters) – Bahrain will sell a third mobile phone licence this year to boost competition and bring down prices, the head of the telecom regulator said on Thursday.

Bahrain Telecommunications Co and Kuwait’s Mobile Telecommunications Co (Zain) operate two networks in the island state of about 743,000 people.

The Telecommunications Regulatory Authority (TRA) has put pressure on Batelco, which has about 70 percent of Bahrain’s mobile market, to cut prices and open its network to competitors.

“The underlying prices of mobile calls have not fallen,” TRA director Alan Horne said told Reuters by telephone. “Some critics have said we have a cosy duopoly.”

Bahrain would likely invite bidders in September and sell the licence by the end of 2008, Horne said, adding that a third operator would help reduce tariffs by increasing competition.

Once a third licence is sold, Batelco would no longer have to seek regulator approval to alter charges for telephone calls, Horne said.

“Batelco will no longer have to have their tariffs approved before setting them,” he said.

The number of mobile subscriptions in the Gulf Arab state rose to more than 975,000 by the end of September, the regulator said.