In which directions have you expanded your services, and how are you progressing with the fiber-to-the-home (FTTH) initiative?
We are now finalizing phase one of our expansion plan. We have rolled out FTTH to more than 460,000 homes in Oman (or nearly 50% of the housing units) and covered 91% of Muscat and 30% of the outside regions. In parallel, we have already started our phase two expansion plan that has three unique features and should be completed by 2030. First, we plan to allocate an element of our investment through a public-private partnership and the tender is currently being floated. We hope that some of the local community companies could participate in this because the return on investment would not only be financial, it will also boost businesses in the area and support broadband to schools for their children's education.
Second, we will introduce another technology, which is Fixed Wireless Access, in order to complement FTTH. We will commercialize our trial that was started last year but in parallel we want to tap into the C-band spectrum that is used for 5G technology. The negotiations with the regulator are moving fairly well regarding that. The third thing is providing a broadband service to remote areas through an initiative from the government. There has been a subsidiary allocated by the government worth around OMR15 million over 10 years. The service has already been launched at the end of last year. In terms of coverage, we have already reached 600 remote villages, which includes connections to about 90 schools and many houses that had almost no telecom service. This broadband service is unique, as it is open access over satellite medium. We have signed with Ooredoo and Omantel and have been overwhelmed by the number of requests we received for the supply of terminals and connections. We were expecting to have a demand of around 600-700 in a year but received 500 in two months. Through these three approaches, by the end of phase two, around 75% of the housing units in Oman should be connected through fiber, another 10% will be through fixed wireless access on our side, close to 14% would be through supporting the operators connecting their towers with fiber, and 1% on satellite. Ultimately our plan is for every single house in Oman to have broadband service.
In comparison to other connection options, why is fiber important?
The pandemic has opened the eyes of everyone to the importance of solid infrastructure. In the past, connectivity was used for surfing the internet, mainly for entertainment; however, when everyone is forced to study and work from home, needs change. We have seen the shift. The highest demand we have seen since the inception of Oman Broadband was the last three months of 2020. We were hit when around 300,000 expatriates left the country for good, but even so we have still managed to grow our business. Now, with the shift taking place in the way we conduct our business and our lives, solid infrastructure is becoming extremely important. The demand for bandwidth doubles every two years and no other medium can compete with fiber. We cannot reach everywhere with fiber just yet so we will complement it with fixed wireless, which is advancing significantly.
What led to your decision to be listed at the Muscat Securities Market in 2023? What role will that play in your long-term strategy?
It is actually part of our license obligation—in January 2019, we were given five years to go public. We have progressed rapidly as a company and delivered broadband infrastructure to almost 50% of the homes in Oman. We set an IPO target for 2023, but we will prepare ourselves ahead of that. It all depends on the market readiness as well because we want to do the IPO when we can get a decent value for our shares.
What is your outlook for the year ahead?
In 2021, we should be able to fast track the migration of users using other technologies into fiber and reach a decent number toward 2022. We will also start on fixed wireless, as the need for solid infrastructure is becoming obvious to everyone. There is a great deal of attention on the ICT sector from the government, which will be a positive thing for Oman Broadband. We have Vodafone as a new client and have started setting up the infrastructure to support them. A new mobile operator will increase the competition in the telecom sector in Oman, although looking at the amount of investment Vodafone needs to do for 5G and with a small market like Oman, it has to be very careful. We have been receiving requests to backhaul its mobile sites with fiber as preparation for that, and many orders are already coming up. Fortunately in 2020, we made an agreement with all six electricity companies to leverage on their infrastructure. This allows us to provide competitive offers to the operators so they can shift their backhaul to fiber.
How will the whole ICT landscape evolve in the long term, and what regulatory focus should be placed to ensure its evolution will be innovation based?
Forming the ICT group reflects the government's aim to increase value on the GDP created from these sectors and its confidence in them. If you look at the ICT on the telecom side, we are doing quite well though on the IT side there is big potential for leverage. We have the infrastructure, and perhaps the government needs to revisit some of its regulations. A greater amount of traffic could potentially transit in Oman as long as we can adopt the open-access approach with competitive pricing. If we step in and are able to liberalize this aspect, then potentially we could attract a great deal of international traffic.