Having adopted a forward-looking strategy for ICT development a decade ago, Oman has made great strides in building up its technological infrastructure and its capacity, within both the government and the private sector. “There has been an increase in the demand for IT services, particularly from the private sector who know the value of creating efficiencies through IT,” Alain Sawaya, managing partner at Oman Data Park (ODP), told OBG. “Big data projects and more IT infrastructure are set to come online.”
Use of technology and, in particular, the internet have grown rapidly among the general public, while ICT services companies have established a presence in the sector, and include home-grown players in the mix. Perhaps most notably, Oman has one of the world’s more advanced e-government programmes, increasing the administration’s efficiency while bringing services closer to citizens.
ICT is seen as central to the country’s long-term economic diversification, as a fundamental support for growth in a range of sectors and as a driver of GDP growth in itself. “ICT penetration is growing horizontally across all sectors, but now it is important to establish the building blocks to enable the sector to develop vertically and stand alone as a future GDP contributor,” Salim Sultan Al Ruzaiqi, CEO of the Information Technology Authority (ITA), a public agency responsible for sector development and regulation, told OBG. “Spending on ICT is usually historically low compared to other sectors. However, the government is beginning to understand the long-term benefits of sustaining investments in the sector.”
Facts & Figures
There were a total of 201,299 fixed-internet subscriptions in Oman at the end of the first half of 2015, according to the sultanate’s Telecoms Regulatory Authority (TRA), representing a household penetration rate of 50%, up from figures released for the same period in 2014, when subscriptions stood at 171,725, a penetration of 42.7%. Fixed-internet demand is thus growing strongly, an unusual trend for a developed country, perhaps indicating the rising demand for home connectivity among lower income groups, as well as increasingly attractive offers by internet service providers (ISPs).
Monthly average revenue per user (ARPU) from fixed broadband stood at OR33.69 ($87.22) at end-H1 2015, up from OR32.46 ($84.03) at the same time in 2014, and several times higher than ARPU for fixed or mobile telephony, according to the TRA.
Fixed broadband predominates, with dial-up connections accounting for only a very small proportion of fixed-internet connections. There were a total of 198,408 fixed-broadband connections, and a penetration rate of 49.32%, up from 167,989 and 41.76%, respectively, at the end of June 2014.
Meanwhile, residential broadband subscriptions rose from 151,504 at end-June 2014 to 179,582 at end-June 2015, while total business broadband subscriptions also grew strongly, standing at 19,422 in June 2015, up from 16,994 the year before.
Broadband
Domestic infrastructure is a vital component of Oman’s expanding ICT industry going forwards. To this end, in April 2014, the Ministry of Transport and Communications announced it was establishing the Oman Broadband Company (OBC) to lay backbone fibre-optic cables around the country. Under the scheme, the OBC will lay cables at the same time as government recycled water utility Haya Water connects its pipes to homes across the country.
According to the OBC’s website, the company aims to cover 85% of the Muscat Governorate by the end of 2020. In the longer term, by 2030, the goal is for all urban areas to have around 95% fibre optic broadband connectivity, with 30% of all rural and remote regions also directly connected. Estimates suggest that by then, about 95% of these rural areas will have some fast broadband connection, via satellite or mobile broadband coverage, if not by fibre optic.
Connection Speeds
While low-speed internet connections are disappearing in Oman, there is still a lot of room for growth in terms of fast and super-fast broadband, which is defined in some markets as being over 24 Mbps. TRA figures for the first quarter of 2015 showed 182,473 (94%) of fixed broadband subscribers had connections of 2 Mbps to 10 Mbps, while 4711 (2.4%) had connections of 1 Mbps to 2 Mbps and 776 (0.4%) had connections of less than 1 Mbps. Only 5914 (3.1%) of subscribers had connections of 10 Mbps or more. As a comparison, 10 Mbps is currently being considered as a minimum obligated speed for ISPs in the UK, according to news reports.
With sophisticated and high-volume content such as internet TV and streaming videos in high demand, and with a solid backbone of international broadband fibre capacity, ISPs may see growing opportunities for extending high-speed internet to fixed-line customers, as well as to mobile internet clients.
By global standards, Oman’s level of ICT development is good. In its “Global Information Technology Report 2015”, the World Economic Forum (WEF) ranked the sultanate 44th for “networked readiness”, that is, the ability of a country to leverage the opportunities presented by ICT. Nonetheless, the room for growing ICT use and building up the market for hardware and ICT services of all kinds is still expansive. The WEF’s “Global IT Readiness Report 2014” estimated that 62.7% of households in the sultanate have access to a personal computer, with 60% using the internet.
Pillars Of Progress
In 2003 the sultanate launched the Digital Oman Strategy to guide the development of ICT across society, with the government to play a central role in the process. The strategy aims to develop human resources and strengthen e-government, amongst other goals, and has been designed with six pillars in mind: developing society and human capital; enhancing e-government and e-services; enabling ICT industry development; developing national infrastructure; governance, standards and regulations; and promotion and awareness.
A range of subsidiary goals have been arranged under each pillar, the first set of which include ensuring that students acquire basic IT knowledge in schools; that citizens, and government employees in particular, are trained in basic IT literacy; that intermediate IT training is offered to professionals; and that lower-cost hardware is available.
Second, under the umbrella of enhancing e-government and e-services, targets include enhancing government processes, redeveloping government applications and improving online services. Oman has made particularly good progress in this regard, and is currently seen as a regional leader.
In line with developing the ICT industry as a contributor to the economy, the third pillar’s aims include encouraging multinational technology companies to establish branches and operations in Oman, setting up centres of excellence to support development, increasing local content (an important factor in encouraging Omanis to use the internet) and fostering partnerships between international companies and local businesses. The ITA has played a central role in developing this particular pillar. Progress is also ongoing in the development of the regulatory environment, under pillar four, including the adoption of a shared platform for government organisations.
The fourth and fifth pillars relate to sector governance and national infrastructure. The former entails developing existing regulations and ensuring standardisation across the sector, while the latter is geared towards enhancing the eServices Portal, a gateway to government services; connecting more government agencies to the Oman Government Network; expanding wired and wireless broadband across the country; and strengthening online payment systems.
Finally, promotion and awareness entails targeted campaigns in order to increase public understanding of the services offered by e.oman, as well as awards for innovation, participation in and organisation of industry events and global promotion of the Omani ICT sector’s indicators and achievements.
At The Helm
The ITA is the lead agency in driving ICT development across the board, with the aim of transforming the economy and supporting social development. “We want to transform Oman into a knowledge economy, that is our task,” Yaqoob bin Dur Mohammed Al Bulushi, deputy CEO for infrastructure and e-services at the ITA, told OBG. “The idea is to include all of society – the private sector, the public sector, and the general public – and that all should use the knowledge base. We want an e-society, in which use of technology is part of our everyday life.”
Part of the ITA’s role is to mediate between ICT service providers, public institutions and the population, with each playing a role in the development of the networked society. The ITA also has some responsibility for implementing the Digital Oman Strategy, which foresees ICT as an enabler for Oman’s longer-term economic diversification on several levels. While the ICT sector is itself an increasingly important contributor to the economy, it can also be leveraged to strengthen education and help assist young Omanis to find work in a range of outward-facing industries competing in a global market. Better use of ICT can also enhance important industries, such as logistics and supply chain management, agriculture, metal manufacture and health care. “IT is becoming an integral part of business in Oman, with a horizontal impact across each sector,” Ahmed Auda, country general manager of Gulf Business Machines, told OBG. “From health care and education to oil and gas, everyone, including the government, can use IT to optimise their operations. It seems that now businesses and government are really catching on to this fact and IT decision makers are prioritising it more.”
The sectors with the highest usage of ICT are telecoms and banking, followed by the government, Auda adds. He sees substantial potential for offering ICT services to small and medium-sized enterprises (SMEs), though he adds that finding skills and financing, as well as ensuring that solutions are easily deployable by clients, remains challenging.
Government Level
Promoting the adoption of technology by government, including cloud computing and communications, is a central goal of Oman’s ICT strategy. Technology can have the benefits of both improving service delivery and accountability to citizens, and of making administration considerably more efficient through streamlining processes and improving exchange and storage of information. The government is building a platform which can be used to share information via middleware ( connecting operating systems and applications), while regulations reforms will allow e-signatures to be used on legal documents, to give two examples.
Al Bulushi sees government uptake of ICT and procurement as a major means of stimulating demand for local ICT businesses and growing the national technology market. He points out that, by becoming increasingly technologically advanced, the government can set an example for the rest of society.
E-Government
Advances made in the sphere of e-government are clear from Oman’s rapid movement up the UN’s eGovernment development index, which ranked the sultanate 48th in the world in 2014, up from 64th place in 2012. The government continues to develop online services improve accessibility to them via smartphones. In November 2015 Mohamed Nayaz, partner of advisory services at professional services firm EY, told local press that “more than 200 government portals were linked with the eGovernment portal,” and said that such services included “online payment of electricity bills and online visa applications”. The development of services and applications has entailed partnership with a range of local and international partners, who bring their technology and expertise to Oman’s e-government drive.
Oman is now more than 10 years into what has been called by some in the media as ‘“one of the most comprehensive e-government programmes on the planet,”’ bringing a wide range of services and information to the population via its online portal.
In January 2015 the government launched the Mobile ID, developed together with Finland’s Valimo, which gives citizens the option of an electronically embedded eID card on their mobile telephones that will allow holders to sign legally binding documents and access official services.
During the same month, the sultanate introduced the ePassport, one of the most sophisticated of its kind, which stores personal information, digital fingerprints and photographs, and is protected by high-end security software. The ePassports make the process of border control considerably more efficient, and are cross-referenced with the eID, improving security and the possibility of coordinating with international authorities. The Royal Oman Police operates a management system with a single unified registration platform for all identity documents issued in the sultanate, which makes the police force’s back office operations more efficient.
Oman Data Park
One of the organisations at the forefront of the sultanate’s efforts to boost its domestic ICT sector, with an eye on export-oriented services, is the ODP, which was launched in 2012 and is 60% owned by Omantel.
The ODP is the first cloud and data service in the sultanate, and the first cloud online in the Middle East. It aims to tap into the huge and growing global cloud industry, and the trend of companies looking for local termination and storage of data. In 2014 the ODP generated revenue of more than OR3m ($7.8m), and attracted investment of OR7m ($18.1m), Ahmed Al Shaaili, head of corporate services, told OBG.
The company, able to draw on the experience, not only of Omantel, but of the minority shareholder, Oman-based 4Trust LLC, has three areas of operation: namely, infrastructure as a service, including colocation and disaster recovery; software as a service, including private and public cloud access; and platform as a service, including dedicated and shared infrastructure. Platform as a service enables clients to deploy applications without the cost and complexity of buying and managing their own underlying hardware, software and hosting capabilities, and supports all the facilities needed to build and deliver web applications and services via the internet.
The company aims to service its clients with a combination of in-house resources and point solutions from different vendors, with the goal of helping clients improve the services offered to their customers in what is an increasingly competitive environment. “As customer demands for services grow, and acceptance of poor service shrinks, providing a consistently positive experience with superior service and a wider range of offerings has become increasingly difficult,” Al Shaaili told OBG. “The new competitive landscape for service providers has put a tremendous premium on the experience of the customer as a key driver of customer loyalty and competitive advantage.” According to Al Shaaili, companies are now faced with the challenge of innovating while ensuring that new products and services are able to meet any surge in demand from greater than anticipated success.
Fostering Innovation
The ITA aims to encourage and support entrepreneurship in ICT, particularly from young Omanis. One of the most important initiatives in this field is Sas, a programme launched by the ITA in 2013. The programme’s name is derived from an Arabic term meaning solid foundations, and with this in mind, it aims to provide the basis for new homegrown SMEs to develop and promote the sultanate’s ICT sector. To this end, the Sas Incubation Centre, according to Al Ruzaiqi, in an interview with the World Bank, has been established to provide technical and business training to start-up companies in order to better prepare them for the market, and to help them win their first contracts, as well as strengthening synergies and partnerships between SMEs in order to promote the formation of an ICT cluster.
According to the ITA, services available under the Sas programme include client needs assessment, coaching and monitoring, accountancy and legal services and business management amongst others. All are important for start-ups, which have innovative ideas, but little in terms of business experience or access to capital. The incubation period is three years maximum, and the programme is only available to Omani nationals, though companies can go on to form partnerships with international investors. Indeed, the stronger the local ecosystem of ICT companies, the better the sultanate’s opportunities for attracting serious foreign investment in the sector.
Companies that SAS has helped establish include app developer AMJ Tech; Areeb Business Solutions, a Microsoft partner that has won government contracts from companies, including Oman Power and the Port of Duqm, for implementing Microsoft solutions; DalTa, which operates a web directory of companies; and Fanadeq Oman, a hotel booking service.
Training & Access
ICT training and familiarisation with technology is a vital part of the Digital Oman Strategy. To this end, one of the leading initiatives has been to set up Community Knowledge Centres (CKCs), which aim to bridge the digital divide by providing hardware and training in local communities.
In partnership with Microsoft, the CKCs offer curricula covering the essential skills and concepts required to use a computer in everyday life, including the internet, document production, computer security and privacy, and an introduction to e-services and how to benefit from them. They are equipped with internet, as well as some educational schemes and a library of relevant books. Amongst the services on offer are digital literacy programmes and activities tailored to different age groups and levels of ICT awareness. At present, more than 30,000 trainees have passed through the doors of the CKCs, some of which are specifically dedicated to women.
Outlook
The development of Oman’s ICT capacity across government services, the private sector and society as a whole over the past decade has been significant, particularly in terms of the volume and range of e-government initiatives instigated.
The implementation of such projects demonstrates that ICT continues to be a government priority, and though falling oil prices may limit resources, the Digital Oman Strategy has strong momentum. State investment in the sector, combined with incubator projects like the ODP, are helping to create a dynamic ICT industry, with opportunities for international players to invest, win contracts and form partnerships with Omani firms, thus tapping into the strong growth in demand for ICT products and services.
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