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Oman 2018 | TELECOMS & IT | REVIEW

Fixed broadband rates have lagged behind, though the Omani government's development plan should help bring new competition into the country to meet its goals of full access by 2040.

Oman's economic development has included high levels of technology adaption and penetration. Access has been steadily rising to be on par with other developed countries, with mobile and broadband penetration rates among the highest in the Middle East and new competition breathing life into the telecoms sector as foreign entrants look to take advantage of a young and connected Omani population. Technology is also central to the Omani government's goals of value-added industry and human capital, and new IT applications in schools and businesses have led to the creation of a burgeoning tech industry working to find new solutions to the problems facing the Sultanate.

The trend in the Middle East has been for mobile phones to become the main source of internet access, and Oman is no different; mobile platforms have overtaken traditional fixed lines to become the means through which most Omanis access the internet. According to the Omani government's Telecommunications Regulatory Authority (TRA), there were more than 6.8 million mobile subscribers as of 4Q2016, a penetration rate of 151%; in contrast, just under half of all households had fixed internet service. Oman is served by five mobile operators. The market leader is Omantel, which is majority owned by the Omani government, but Ooredoo, a Qatari-owned firm is a close second. The two have long controlled the Omani mobile phone market, but the arrival of mobile virtual network operators (MVNOs) has shaken up the market. By renting space on Omantel and Ooredoo's networks to offer lower-cost services, MVNOs have rapidly carved out a chunk of market share by targeting younger, low-income consumers. MVNOs FRiENDi and Renna were the first such entrants in the Middle East market when they arrived in Oman in 2009, and within a year after launch they had combined to take an 8% market share. As of the end of 2016, MVNOs represent 16% of the Sultanate's mobile phone market, and a third tender planned for 2017 should bring another new entrant to the market, further improving options for consumers.
While broadband has lagged behind, the Omani government has been working to increase fixed access for households. The Oman National Vision 2040 development plan calls for every home and business to have broadband access by 2040, an ambitious goal for the Oman Broadband Company, the lone broadband installer currently active. Obstacles to increased broadband penetration include challenging geography that makes it expensive to lay new broadband lines in the rural areas that make up 23% of the Omani population and a lack of competition that has curbed new investment, but the government approved a National Broadband Strategy in August 2016 that lays out a plan to overcome these obstacles. The strategy has three main components: restructuring telecom regulation, raising demand, and installing new infrastructure. By streamlining regulation to facilitate new entries to the broadband market, the Omani government hopes to increase competition, lowering prices and spurring new investment that will ultimately benefit consumers. To raise the demand that will attract new arrivals to the market, the government is also investing in new programs targeting students and businesses to make broadband a more integrated part of the Omani economy.
This latter effort also speaks to the Omani government's larger efforts to incorporate available technology into existing sectors for social and economic development. Healthcare, education, and public safety have been identified as three areas where increased broadband access can reap benefits by improving efficiency and allowing for new international connections. In education, for example, the Omani government sees great potential in distance education to give rural citizens the ability to access previously unavailable resources, increasing human capital and building a more skilled and capable country. Similar benefits are available by giving healthcare providers virtual access to rural communities via technology. Well aware of the need to back these dreams with investment, the Omani government has been using its wealth to fund opportunities and make up for the shortcomings of the Sultanate's small venture capital sector. In 2016, the Oman Investment Fund launched a USD200-million technology fund that will invest in start-ups both nationally and regionally, leading the push toward a stronger sector and more diversified Oman.