Oman telecoms market
The Sultanate of Oman is located in south west Asia at the entrance of the Persian Gulf. Like many Gulf countries, Oman has been focussing on reducing its economy's dependency on oil through diversification, industrialisation and privatisation.
In an attempt restructure its telecoms sector, Oman partially privatised the incumbent Oman Telecommunications (Omantel) in 2002 and at the same time formed the Telecommunications Regulatory Authority (TRA).
To prepare for emerging competition, the former monopoly Omantel was separated into fixed and mobile entities in 2004. The mobile branch, Oman Mobile, was later merged back into Omantel in December 2011 as part of internal restructuring to enhance cost and service efficiency. Last September, the Omani government – Omantel's majority shareholder with a 70% stake – announced that it is planning to sell a 19% stake in the leading operator, which would reduce its holding to 51%.
Competition was introduced to the fixed-line sector in 2010. Telco Nawras, subsidiary of Qatari operator Ooredoo, was awarded the country's second fixed-line licence in November 2008 and launched fixed-line and broadband services in 2010. This was followed by the award of a 25-year concession to establish and operate a fixed-line voice and data network in Muscat to a consortium of Hong Kong's PCCW International and local firm Awaser Oman in November 2012.
Oman has one of the highest mobile penetration rates in the Middle East, at just under 180% of the population by the end of June 2013. Total mobile subscriptions are still increasing due to a very young and growing population. Omantel Mobile's network market share (including mobile resellers) is estimated at 58.6% as of June 2013.
Competition in the mobile sector opened up in 2005, with the introduction of a second mobile licence to operator Nawras. The mobile market is dominated by Omantel and Nawras.
Oman was second only to Saudi Arabia in launching 4G in the Middle East. Sweden-based Ericsson and China-based Huawei signed agreements with Omantel in May 2012 and the operator was the first to launch LTE services in July 2012. By April 2013, the company had extended its 4G coverage to 88% of the population.
Nawras launched a rival 4G network in February 2013, following an earlier agreement with Chinese vendor Huawei.
Oman has pioneered the MVNO model in the Middle East and remains the only Gulf state to have operational MVNOs. Both Omantel and Nawras host two MVNOs on their networks. Through Omantel's network, FRiENDi Mobile, was first to market in April 2009, followed by Renna in May that year. In October 2013, Nawras signed reseller agreements with Mazoon and Samatel.
According to TeleGeography, Omantel's network hosts the majority of MVNO subscribers, which has helped to boost both its wholesale and retail customer base over recent years.
Omantel has also taken strides to enhance the country's international connectivity. In January, it joined a consortium to construct a new subsea cable system called Asia Africa Europe-1 (AAE-1). The 15,000km cable will run from south east Asia to Africa and Europe through Egypt and is expected to be ready for service by 2016.
Omantel also signed an agreement for a submarine cable linking the Middle East, India and the Far East last May. The Bay of Bengal Gateway (BBG) system will span approximately 8,000km and commercial operation is expected to start by the end of 2014.
With a total of 10 regional cables presently connected to the country, Oman's increasing international connectivity is attracting the attention of global carriers.
TeliaSonera International Carrier (TSIC) launched a PoP in the country in February in partnership with Omantel. The move will see TSIC offer IP, Ethernet, international voice and IPX-based services.
"Oman's geographical advantage being a natural hub enabled Omantel to become as a key interconnection point for international carriers. Partnering with TSIC positions us as a true link between the east and the west," says Al Rawas. "It has expanded our visibility and positioned Omantel as the go-to provider for international carriers and service providers seeking to do business in Oman as well as the rest of the Middle East."