Telecoms & IT
eSociety on the Cusp
In 1995, Oman’s Vision 2020 made provisions to diversify the economy away from traditional oil and gas dependence toward a more knowledge-based economy. As a result, OMR1 billion ($206 billion) has been earmarked for the IT sector by 2018. Salim Sultan Al Ruzaiqi, the CEO of the Information Technology Authority (ITA), established in 2006, clued TBY into the Sultanate’s “eOman” program. “The eOman initiative has three tracks,” he explained. “The first is e-government, which is designed to allow the government to move all of its services online [a scheme that includes the training of 93,000 civil servants]. The second is building up knowledge in society [100,000 PCs were handed out, while families with university students have received laptops]. The third is attempting to facilitate industry, and cyber-security is an important part of that also.”
Oman’s ICT economy is crystallized in the Knowledge Oasis Muscat (KOM) established in 2003 as a techno-park. It is tasked with providing global ICT entities with an address, giving students an educational springboard into the IT business world, and facilitating the establishment of innovative SMEs of benefit to the Sultanate.
Meanwhile, internet and telephony consumption patterns among the public confirm that ICT take-up is indeed on the rise. To even out the availability of telephony in the Sultanate, Oman’s Telecommunications Regulatory Authority (TRA) is set to complete a national project by year-end 2013 to deliver basic telecoms services to around 150 remote villages in cooperation with the two licensed telecoms operators, Oman Telecommunications (Omantel) and Nawras. The scheme involves a total of 120 base transceiver stations (BTS) in rural areas.
THE TELECOMS MARKET
For the first half of 2013 Oman’s fixed telephone lines, at 9.31 per 100 inhabitants, numbered 337,000, rising from 305,000 in 2012 and 332,000 in 1Q2013. Total mobile subscribers stood at 5.4 million, up 4.5% compared to the end of December 2012. The active mobile broadband subscriber penetration rate had reached 57.27% by end-2Q2013, with total active subscribers at 2,074,985. Fixed telephony services (other than fixed internet) are provided by Omantel, Nawras, and Samatel, while fixed internet services are provided by Omantel and Nawras, and mobile services are delivered by Oman Mobile, Nawras, Friendi, Renna, Samatel, and Injaz.
Oman Telecommunication Company (Omantel) has a strong hold over the Sultanate’s landline telephone (87.7%) and internet access markets. Its fixed services include national and international calls from fixed lines, ISDN, leased lines, MPLS internet services, and wholesale services. The mobile services provided by the company’s Omantel mobile division include 2G, 3G, and voice services, and 4G data services on the LTE platform, as well as 3G mobile broadband services, and roaming services. Omantel is 70% owned by the Omani government, while a 30% stake was listed in 2005. And on September 17, 2013, Omantel announced government plans to divest a further 19% stake, based largely on the recent recovery in the Muscat Securities Market (MSM). In April of 2008, Omantel purchased a 65% share in WorldCall Pakistan, spreading its international exposure.
In 2005, the Qatar Telecommunication Company (Qtel, now renamed Ooredoo) and its partners received the second mobile services license in Oman and commenced providing a broad raft of services, including 4G data under the Nawras brand. In October of 2013 Nawras was voted “Best Operator Network” at the Telecoms World Middle East Awards held in Dubai, and “Leading Telecommunications Company” at the Arab Investment Awards held in Abu Dhabi. The company was the first operator in Oman to provide customers with a third 3G+ data carrier on 900 MHz delivering a superior broadband internet experience with enhanced indoor coverage.
ON THE GO
The Sultanate’s mobile penetration rate had reached 190.29% at the end of 4Q2012, ranking Oman above most jurisdictions in the world except Macau (275%) and Hong Kong (230%). This figure was well in excess of both global and Middle East mobile penetration rates of 89% and 106%, respectively, according to the Ericsson Mobility Report for 2012. Yet, the TRA report for 1Q2013 shows a marked fall to 145.80%. Fixed post-paid lines rose 12% from the 4Q2012 to 253,069, and yet pre-paid connections fell 3% for the period. On the other hand, mobile number portability has been on an upswing in 2013, up 9.8% to 11,437 lines in 3Q2013 from 10,413 a quarter earlier, confirming the competitive pricing environment. Post-paid mobile subscribers stood at 479,121 at end-1Q2013, rising 3.11% in quarterly terms. Pre-paid mobile subscribers were at 4.8 million on a modest fall of 0.2% from 4Q2012, with resellers shedding 13.8% in subscriber numbers from 575,308 to 496,197.
For the first half of 2013, according to company data, Omantel Mobile remained the leading mobile operator with a 58.6% subscriber market share including mobile resellers and a 63.8% revenue market share. The total mobile market in 2Q2013 grew by 8.7% over 2Q2012 and Omantel Mobile, including its mobile resellers, posted growth of 8.9%, while net additions of 259,700 accounted for around 60% of total net additions.
For 1Q2013 TRA data indicates mobile subscriber growth of 3.2%, leading to a market penetration rate of 185.5%. While Oman Mobile had a market share of 48.6%, Nawras accounted for 40.6%. Resellers posted a 10.8% market share for the quarter, showing a 31% fall in subscriber numbers.
Omantel Group revenue has, for the first six months of 2013, rise to OMR239.3 million from OMR234.5 million year on year, with net profit of OMR60.5 million against OMR62 million in 2012. Rival Nawras’ first half-year results revealed 3.3% higher revenues year-on-year of OMR98.4 million, despite a lower net profit of OMR15.2 million, down from OMR19.5 million. The company attributed this decline to higher depreciation costs due to network modernization.
Both telecoms operators have seen growth in mobile and fixed broadband services compensate for a waning of other services, such as SMS. According to the TRA, the number of mobile broadband subscribers had soared from 425,000 in 2009 to 1.9 million as of March 2013. Mobile broadband penetration, at 52.43% at end-1Q2013 points to marked growth potential. Yet average revenue per use (ARPU)—a key measure for the mobile business—has been on the decline. Omantel’s blended ARPU (post- and pre-paid subscribers) of OMR12.6 per month had fallen to OMR8.8 per month by 2Q2013.
In October of 2013 Omantel was assigned BBB+/A-2 ratings by S&P and an A3 rating by Moody’s. According to S&P, the ratings confirms Omantel’s robust financial ratios and its competitive position in Oman’s fixed-line and mobile telephony markets, as well as solid operating performance and marked profitability.
STICKING TO THE WEB
The internet naturally underpins Oman’s evolution into an information society. Accordingly, the government has created a broadband company to boost IT penetration, with the capital city Muscat having seen an investment of OMR100 million ($260 million). Domestic delivery is to be left to small-scale ISPs to encourage competition among SMEs. In October 2013, Oman’s representation at GITEX Technology Week 2013 held at the Dubai World Trade Centre by, among others, the Information Technology Authority (ITA), Knowledge Oasis Muscat (KOM), and a number of government organizations sought to bolster ICT-related SMEs and their cooperation with major industry players. Broadband has seen continued popularity and greater penetration in Oman when compared to the cheaper and slower internet dial-up services, the number of which had declined to just 4,860 subscribers as of June 2013. Overall there were 2.1 million internet users by June 2012, according to internetworldstats.com. And by the end of 1Q2013 there were 127,549 total fixed internet subscribers at up 6.8% against 119,398 in the previous quarter. The penetration rate per 100 households for fixed subscribers had climbed to 31.71% by end-1Q2013 from 29.68% in the previous quarter. Additionally, fixed broadband subscription rose by 7.8% from 113,324 to 122,124 subscribers. Meanwhile, the penetration rate per household had risen to 30.36% from 28.17%. The data revealed 1Q2013 mobile broadband subscribers up by 15.4% over 4Q2012.
THE PAPER MEN
The Sultanate boasts a number of dailies, including four English titles, The Week, The Oman Observer, The Muscat Daily, and the Times of Oman. The latter, predominantly the territory of expatriates, and launched in 1975 as a tabloid, was the country’s pioneering English language newspaper, evolving from a weekly to the prestigious daily it is today. Ahmed bin Essa Al Zadjali, the CEO of parent company Muscat Press & Publishing House and editor-in-chief of Arabic sister title Al Shabiba, commented on the significance of the electronic era for the press. Accordingly, timesofoman.com delivers comprehensive mobile and multimedia-enabled content, “That provides viewers and users an opportunity to contribute to the news process and interact with it…” As the only newspaper in the Sultanate operating an online e-paper, hugely popular with Omanis living outside the Sultanate, Zadjali offers the following description, “In more ways than one, the Times of Oman was, is, and will remain, the official chronicler of the Sultanate.”
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