Oman: Enhancing broadband connectivity

Operators in Oman agree that broadband services have a very good potential for growth
Budeconn, Country profile, Development, Fixed line, Internet, Mobile, Oman, Oman TRA, Omantel, Ooredoo, Regulator MVNO, Telecoms

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With a population of 3.9 million, Oman has a robust telecommunications sector with a healthy competition, with Omantel and Ooredoo Oman and different MVNOs in the market that have captured 10% of the total market share, according to BuddeComm.

In 2014, profit of Omantel and Ooredoo Oman grew to OMR153.4 million from OMR148.3 million in 2013. The consolidated revenue of both operators rose to OMR708.3 million from OMR665.5 million in 2013. The total assets of both companies by the end of December 2014 stood at OMR1,22 million compared to OMR1,096 million for the same period of 2013. The total capitals of both companies stood at OMR140.1 million.

“The introduction of MVNOs in Oman is one of the boldest regulatory moves taken in the region. Oman was the first to allow MVNOs and for a long time the only country in the region with MVNOs. Their introduction has been a positive development in the market and led to enhanced competition. The regulator has been able to achieve this without removing the incentive for capital investment by Ooredoo and Omantel which is the main risk of introducing a third mobile operator. In a developing country like Oman, significant infrastructural investment still required and this has therefore proved to be a very smart strategy. The TRA should be applauded for leading in this respect,” explained Greg Young, CEO at Ooredoo Oman, to CommsMEA.

The fixed line sector is providing operators the chance to enhance the telecommunications sector, according to analysts. The fixed broadband grew by 30.4% in 2014. The mobile broadband also grew by 32.1% compared to 15.4% for the data services.

Both companies said that broadband services have a very good potential for growth.

“At present, broadband is perhaps the greatest opportunity in Oman’s fixed line market, as reflected by the Ministry of Transport and Communication’s agenda for 2015,” said Young.

He added that this year will “undoubtedly” see major initiatives break ground to provide fast and affordable broadband services to communities across the Sultanate. “Agreements have already been made with all operators by Oman Broadband Company (OBC), a government owned entity, to enable companies like Ooredoo to use OBC’s network to provide services through existing fibre optic networks. The use of OBC’s telecommunication network is now a part of Oman’s national strategy for the development of broadband and the internet.”

According to Young, the government’s fibre, represents an extremely important asset that will be made available to the people of Oman, bringing world-class broadband services to both consumers and businesses. “In this regard, the TRA and OBC should be applauded for their collaboration in bringing this project to fruition and making this asset available at a wholesale level to all operators. We are expecting this new state-of-the-art fixed fibre to be delivered to local communities in the second half of 2015 with many exciting possibilities presenting themselves as a direct result,” he said.

The government’s investment is solely aimed at development, not profit, consequently, on the corporate side of things, companies like Ooredoo are treated equally compared to government owned businesses like Omantel, which has promoted increased, equal and fair competition in the market, he explained.

“As an initiative for fixed line development, using OBC’s existing fibre-optic networks will help operators reach over 100,000 units in the Governorate of Muscat by the end of 2015.”

Growing Opportunities

Mobile messaging is on the decline for the mobile operators; due to the migration from SMS and MMS to messaging applications in line with the proliferation of smart phones and mobile Internet. In 2014 VoIP services such as Whatsapp and Viber are permitted to offer services in Oman, placing further pressure on the market, states BuddeComm.

“Change will forever remain imminent with mobile technology and telecommunications, this is something that all businesses working with technology and digital solutions need to embrace as a positive opportunity. With the decline of SMS and MMS over the years, applications like Whatsapp, Facebook and Snapchat arose, with companies worldwide maximising on this trend by providing new, smarter services and packages that support this shift in technology,” Young explains to CommsMEA.

This constant transformation that Young describes enables new opportunities for the telecommunications sector in Oman. “Oman’s telecommunications industry is relatively young, and the market is continually presented with new opportunities as new technological advances and services come along. The long-term trend with messaging is a good example, as it created room for companies to develop innovative propositions that can generate a higher rate of customer conversion by providing smart solutions to meet market demands,” he said.

“The evolution of mobile devices, the internet, mobile apps, fixed line connections, and all other advances in technology, are also considered opportunities in terms of how they can be used to provide leading products and services and drive higher revenues,” he added.

Moreover, the business sector offers also an opportunity to develop the operators’ activity. “There is an increasing need to focus on the B2B sector, whether small and medium enterprises or larger corporations. This is not only in terms of building the scale of provisions, but also to encourage international corporations to continue investing in Oman’s infrastructure. Our role is to support such growth through technology; we have an almost unparalleled ability to support the infrastructural development and operation of the Sultanate through technology,” Young concluded.

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