The Omani telecoms industry is among the most developed in the region in terms of the services provided and the competitiveness of the market. The mobile penetration rate increased to 143% in June 2019, up from 141.3% in 2018. Meanwhile, the number of fixedline subscriptions grew to 448,189 in the same period, marking a penetration rate of 72%. Currently, there are 15 licensed telecoms providers in the country classified across three categories. The first includes the country’s four main operators, Omantel, Ooredoo Oman, Awasr and Oman Future Telecommunications (OFT); international gateway providers Telecom Oman and Connect Arabia; the infrastructure and services firm Oman Broadband Company and AlMadakhel Investment, which installs and operates the country’s marine telecoms system. The second category includes mobile resellers companies Renna, Friendi and Zajel, while the third category includes five private telecoms operators that are not connected to the public network.
As the country’s leading provider of telecoms services, Omantel continues to invest in and expand its network to meet increasing demand for data services. Furthermore, the company remains focused on executing strategy “Omantel 3.0” strategy to deal with quickly, changing market dynamics and to maintain the firms primary position in the sector. In 2019 Omantel held a 57.3% share of the mobile market and a 71% share of the fixed-line telephony market. In 2017 the company bought a 21.9% stake in the Kuwaiti telecoms firm Zain Group, generating additional revenue sources and adding shareholder value.
Omantel’s revenue reached OR1.89bn ($4.9bn) in the first nine months of 2019, up 22.4% year-on-year (y-o-y). In the same period net profits increased by 75.6% to OR198.3m ($515m), compared to OR112.9m ($293.2m) in the first nine months of 2018. This solid overall performance of the company can be attributed primarily to Zain Group, which contributed OR179.6m ($466.4m) to the net profits of Omantel. However, revenue from the firm’s domestic operations declined by 4.5% y-o-y to OR396.3m ($1bn), while domestic net profits fell by 13.9% to OR59.3m ($154m). The market capitalisation of Omantel stood at OR441m ($1.1bn) as of September 30, 2019, making it the second-largest company on the Muscat Securities Market (MSM). Nevertheless, the company stock price declined by 25.6% during the first nine months of 2019, and the MSM 30 Index dropped by 7%.
The second-largest mobile service provider in Oman, Ooredoo reported revenue of OR211m ($548m) for the first nine months of 2019, though this was down 0.4% y-o-y. Nonetheless, net profits increased by 0.7% to OR27m ($70.1m) during the same period. The company’s fixed-line telephony customer base increased by 16.3% y-o-y, while the mobile post-paid customer base expanded by 14.4% y-o-y. This growth was supported by the company strategy to deliver new products, promotions for prepaid and home broadband services. The company has continued to invest in its coverage network and has achieved mobile geographical LTE coverage of 97%. The market capitalisation of Oordeoo was OR341m ($885.6m) as of September 30, 2019, while the company stock price declined by 7.7% during the first nine months of 2019.
In September 2019 OFT signed a strategic partnership with UK company Vodafone to launch the country’s third mobile service provider, with operations set to begin in early 2020. The OFT consortium comprises the Qatar-headquartered ITQAN Tech Development and a range of local pension and investment funds. The agreement with Vodafone includes the provision of essential services to establish the new company, including the use of the Vodafone brand name, technical support and professional expertise. The entrance of a new operator into the market is expected to benefit the sector by stimulating innovation and competition, thereby benefitting consumers by providing diversified promotion packages and services.
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