OMANI COMPANIES

Omani companies

Omani companies

1. Omani Mobile Market

Introduction

Until recently, telecoms companies in the Oman seemed content to dominate their home markets and there was relatively little cross-border competition. However, there are signs that this situation is changing and national carriers are seeking to expand, partly because of the saturation of domestic markets. The award of new GSM licenses is increasing the number of opportunity for expansion and helping to drive down prices. During the months leading up to the entry of new telecoms companies into particular markets, existing operators have been provoked into either the range or the coverage of their services.

Although some markets may be close to saturation point, there is still room for expansion across the region as a whole. There were an estimated 25m mobile phone subscribers in the Oman by the end of 2002, and although this figure looks set to reach 33m by the end of this year, most adults will still not own a mobile phone. The UAE had the highest penetration rate at around 70% in 2003, following by most of the other Gulf states with 45-60%, although Omani recorded a figure of just 25%.

There was most room for expansion in North Africa, Jordan, Lebanon and Syria, where figures generally ranged from 15% to 23%, although it seems unlikely that such countries can achieve the same level of penetration as the UAE, given their lower average incomes. However, new technology is cutting costs, so that each handset needs to generate less income in order to prove profitable. A key factor over the coming years will be the extent to which operators can provide services for those with less disposable income.

It is up to the main operators to develop innovative methods of attracting new customers. For example, the "pay as you go" model was originally designed with the African market in mind, to cope with areas where billing was difficult because both incomes and postal services were limited. More recently, the "pay as you go" system has been utilized in South-east Asia, enabling customers to opt for SMS services only.

Omani Competition

Given the limited penetration of the Omani market, there seems to be plenty of opportunity for new operators entering the market, so it is likely that there will be a large number of bidders. Although it has been slow to offer cutting edge services, Omani Telecom has responded to the likelihood of competition by seeking to expand its customer base and offering new prepaid services. In March this year the company awarded a GSM maintenance contract to the country's Advanced Electronics Company (AEC) and Nokia. The initial public offering of 30% equity in Omani Telecom last year raised a massive $4bn and made the company the second biggest listing on the country's stock exchange.

Oman has already awarded its second GSM license. In February, the Omanian Ministry of Post and Communications announced the award of a 15-year operating license to the Turkcell led Omancell consortium. The license is renewable every five years but Turkcell will ...