With growing numbers of internet subscriptions, both mobile and fixed, and a youthful population, Oman offers great promise for the development of a vibrant digital economy. The rapid spread of high-speed broadband through desktop computers, tablets and phones offers new and smarter ways to live, work and play, challenging government departments and businesses to better adapt the way they serve citizens and customers. There are also opportunities for educators and entrepreneurs to nurture talent and encourage the country’s young consumers to become creators of content, solutions and, ultimately, jobs. For established businesses, such as telecoms providers, the changing data-driven landscape is being disrupted by international innovators, encouraging them to change their business models and move away from simply offering connectivity and technical infrastructure to becoming converged, integrated technology companies offering a range of software and hardware solutions to both commercial clients and ordinary consumers.
As Oman has a small population spread over a large area, the rapid geographical spread of high-speed data services offers new opportunities to ensure citizens across the sultanate have equal access to goods and services that previously might have been confined to larger urban areas. The government has invested in the infrastructure to support ICT – establishing a data centre and a company dedicated to the rollout of broadband – and its agencies are incentivising companies in the private sector to invest in new infrastructure through licensing obligations.
At a time of lower oil prices, “smart” solutions also offer government departments and businesses the chance to provide a higher level of service at a reduced cost to citizens and consumers.
By The Numbers
According to figures from the Telecommunications Regulatory Authority (TRA), at the end of 2015 fixed-line internet subscriptions in Oman reached 236,005, an increase of 31% over the previous year, and there were 3.25m mobile broadband subscriptions, which was up by 12.5%. In addition, 43.98% of households had fixed broadband and 77.62% of the total population had mobile broadband subscriptions. Among fixed-line subscriptions, the number of residential customers grew by 25%, from 193,234 in the first quarter of 2015 to 210,708 at the end of the year, and business consumers increased by 24%, from 18,199 at the start of the year to 22,502 at the end of 2015. Although their numbers are dwindling, there were still 1339 business subscribers using dial-up internet at the end of 2015, as well as 1432 residential dial-up customers in the country.
Connection Speeds
Despite strong expansion in the broadband customer base, however, there is considerable room for growth in the use of high-speed internet services. The increasing popularity of services that require higher download speeds looks set to drive this demand. “Although services that require high speed are not there yet, this is what I am expecting to see in the very near future,” Ayman Madieh, vice-president of technical solutions and marketing for Huawei Tech Investment Oman, told OBG. “Netflix has been available in the GCC since the start of 2016, and it is a company that is very clear about the ultra-high-definition service quality it requires, including a steady connection at 25 Mbps, and so they are educating customers.”
At the end of 2015 very few broadband customers in Oman enjoyed the 25 Mbps download speeds that are necessary to stream Netflix videos on ultra-high-definition television sets, according to the TRA. The authority’s annual report showed that only 6750 fixed-line customers had broadband speeds above 10 Mbps, with 225,255 customers representing the almost 97% of clients operating on 2-10 Mbps. There were also only 1229 customers with even lower speeds of between 256 Kbps and 2 Mbps.
Fixed-Speed Comparison
The scope for growth in faster broadband services can be seen when comparing Oman to the 35 OECD countries. In March 2016 fixed broadband penetration in Oman, at all speeds, was 5.81%, according to the TRA. However, OECD data for June 2014 showed the lowest level of access in an OECD country was in Turkey, where overall broadband penetration was 11.5%. In Turkey, 1% of the population has access to advertised broadband speeds below 10 Mbps, 7.7% to speeds between 10 Mbps and 25 Mbps, and 2.8% of the population is using speeds over 25 Mbps. By contrast, Switzerland had the highest fixed-line broadband penetration at 47.3%, and showed 26.8% having access to fixed-line broadband over 25 Mbps. South Korea and Japan are far ahead of other OECD countries in terms of access to fixed broadband speeds of over 100 Mbps, with penetration rates at those speeds of 34.1% and 19.7%, respectively.
Pricing
The OECD also compared the range of monthly broadband tariffs based on purchasing power parity in US dollars in its member states in September 2014, the latest available data. Slovenia’s prices ranged from $23.35 to $1460.78. In Turkey customers were charged from $13.79 to $778.07, while in Switzerland customers were charged $16.34-105.93. In South Korea and Japan, where ultra-high-speed use is common, the highest tariffs were $33.98 and $51.96, respectively.
In Oman a comparison of broadband tariffs offered by Omantel, Ooredoo and Awasr – a new firm focused solely on residential and business fibre-optic broadband – showed a range of between $51.83 and 386.16 for home broadband, and rates ranging from $33.76 to $2860 for business customers.
In the “OECD Digital Economy Outlook 2015”, the organisation predicted the full potential of the digital economy had not been achieved by its member states, and that effective complementarity of mobile and fixed-line networks was key to enabling the optimum use of new systems, such as the “internet of things”. The OECD also reported that businesses in its member states had yet to make full use of ICT applications, with 95% of enterprises employing more than 10 people using a broadband connection, but only 31% using resource planning software, 22% adopting cloud solutions and 21% receiving electronic orders.
Steering Development
The government agency responsible for ICT development in Oman is the Information Technology Authority (ITA), which was established by royal decree in 2006. The ITA is tasked with implementing the Digital Oman Strategy through a number of ICT initiatives around training and education, sector governance, the development of technology industries and a digital society, building digital infrastructure, advising on cybersecurity, leading the development of e-services by government and fostering awareness of the ICT industry in the country and its significant achievements.
At a ministerial level the Ministry of Transport and Communications is also responsible for implementation of government policy for the wider sector, while the TRA oversees the country’s telecoms companies, the infrastructure and services of which play a key role in facilitating and supporting an array of ICT activities.
Infrastructure
Two of the key contributors to the development of Oman’s internet infrastructure are the telecoms companies Omantel and Ooredoo. Omantel, which is 51% government-owned, spent OR120m ($311.7m) in 2015 on improvements to its broadband infrastructure. Ooredoo, for its part, stated in its 2015 annual report that it had completed its own 5500-km fibre “backbone” serving the length and breadth of the country, the result of OR125m ($324.6m) worth of investments in new technology in recent years. In some instances, the country’s two main telcos are obliged to offer services to remote communities or schools as part of their licence agreements with the TRA.
In its 2014 annual report, the authority noted that Omantel had provided broadband to 104 villages as part of the TRA drive to connect 250 remote communities, and that Ooredoo had connected 120 schools to the broadband network to fulfil a licence obligation. In addition, fibre reached 800 homes in Madha in the Musandam Governorate. In 2014 a new piece of legislation was passed, allowing existing telecoms cables to share access to homes with other utilities so that fibre-optic cables could potentially be laid through, or at the same time as, sewers or other ducting connecting properties to the utility grid.
Oman Broadband Company
In 2014 Oman Broadband Company was created as a government-owned enterprise established to implement the national broadband strategy by providing an integrated national network across the sultanate. Said Abdullah Mandhari, CEO of Oman Broadband Company, told the Times of Oman in July 2014 that the firm’s aim is to cover more than 80% of the Muscat area with broadband by 2020, and its five-year plan includes a strategy to target other parts of the country and ensure that fibre-optic broadband enables new free zones at Sohar and Duqm to become “smart cities”.
The company is working in partnership with Omantel, Ooredoo and Awasr, as well as with other utility providers to share the cost of excavation and cable-laying. “One of the major costs is civil works and ducting, and so sharing these costs with other utilities will enable us to provide our network and broadband infrastructure to the public at a very affordable price,” Auf Abdul Rahman Al Bulushi, Oman Broadband Company’s senior manager of commercial affairs, told OBG. In remote communities where it may not be feasible to deliver fibre-optic cables, Oman Broadband Company is investigating the possibility of providing high-speed broadband in partnership with satellite companies.
New Provider
In November 2015 the newest Omani entrant, Awasr, signed an agreement with Oman Broadband Company to offer broadband services on the fibre-optic network it was providing to 70,000 properties in the Muscat area. In March 2016 Awasr began offering its fibre-optic services as the country’s first specialised broadband provider in the Al Khoudh, Mawaleh, Al Hail, Ma’abela and Shatti Al Qurum areas of Muscat. However, the company announced in April 2016 that the TRA had upgraded its licence to Class 1, and it now plans to expand to the northern governorates of Batinah North, Batinah South, Al Dhahirah and Buraimi, as well as to Al Dakhiliyah, Al Sharqiyah North, Al Sharqiyah South, Dhofar and Al Wusta in the south. Awasr’s partners also include ViewQuest, which is one of Singapore’s high-speed broadband providers, and with Orixcom, which specialises in internet capacity and cloud solutions.
Data Park
The need to enable businesses, government entities and consumers to benefit from cloud-based solutions was behind the development of the Oman Data Park (ODP), which began offering its cloud-based services to customers in 2012. ODP was created as a joint venture between Omantel and 4Trust, a private Omani data centre company. It has two Tier-3 data centres: a 192-rack, 12,000-sq-foot facility based at the Knowledge Oasis Muscat (KOM); and a second facility 50 km away which tends to be used for disaster recovery solutions.
The park now has signed on more than 300 corporate clients, and in 2016 it reached an agreement to licence re-sellers who will be able to sell its managed co-location and cloud services across the country to a broad range of customers. “Within our cloud offering, we started with infrastructure as a service, then we moved into software as a service. We are now working on platform as a service, although infrastructure as a service seems to dominate the market,” Maqboul Salim Al Wahaibi, general manager of ODP, told OBG.
ODP has also found that commercial clients in different sectors, such as banking and the oil and gas industry, may have different requirements for cloud solutions, with the latter often using a hybrid model, storing some of its technical data in-house and using data centres to co-locate other parts of its ICT systems, which is gaining popularity. Alain Sawaya, managing partner of ODP, told OBG, “Globally, there is a strong, developed trend in the IT sector for outsourcing and cloud services, whereas these are really only initially catching on in Oman. This evolution will be essential as most firms simply cannot afford the capex involved in building their own data centres.”
The benefits, however, are becoming increasingly evident. For businesses unable or unwilling to store data outside the country, ODP offers a cheaper solution than running an in-house ICT department. At a time of lower oil revenues, many businesses are seeing the advantage of co-locating ICT facilities. Cloud solutions also offer the opportunity to transform ICT outlays from a capital expense to an operational expense. “The main driver in this kind of business is the economy-of-scale factor, and especially in these tough financial times, CFOs and CEOs have started seeing ways of minimising their expenditure on IT infrastructure, which benefits us as a business,” Al Wahaibi told OBG.
This trend is also driving sales of ICT solutions and services in Oman today. “What we are witnessing today is that companies are transforming their IT departments into an outsourcing model, where they can oversee the IT processes irrespective of the location as long as their data is secure,” Iyad Al Chammat, general manager of Gulf Business Machines Oman, told OBG.
Big Data & Analytics
Enterprises in Oman are increasingly looking for ways not only to store their own information more securely, but also to leverage the opportunities that ICT solutions offer them to mine the data they hold on their customers. “Our growth areas are in cloud, mobility, security, big data and analytics, and all of these mega-trends are becoming critical as our customers are constantly seeking ways to optimise costs,” Al Chammat told OBG. “Companies are seeking more business intelligence about their customers’ behaviour.”These kinds of solutions also offer new revenue streams for telecoms companies as they move from providers of voice and connectivity services and into data. “Tomorrow’s economic value is in working as solutions providers, and the way we bring solutions to customers to achieve a vision of a digital society is how we will act as economic multipliers,” Darren Tong, chief operating officer and acting CEO of Integrated Communications Oman (TeO), told OBG.
Cybersecurity
As Omani companies begin to hold more data, some of it sensitive and potentially valuable, their requirements for robust cybersecurity solutions will also increase. Sawaya told OBG, “In terms of cybersecurity, Oman definitely has some catching up to do when it comes to both regulations and mindset. Many people simply do not take the risk seriously, but cybersecurity is an essential part of any comprehensive IT service.” The ITA’s 2015 annual report revealed its Information Security Division had prevented more than 5m cyberattacks in Oman, of which 4.8m were attempted hacks against government networks and a further 398,000 were attacks on government portals.
Al Chammat pointed out that businesses and other entities also need to focus more of their security efforts on educating their executives on the threat to data security that may be posed by employees or former employees, particularly when more staff bring their own devices into the workplace. “What we are observing currently is that chief information officers and chief security officers are becoming more aware of the impact of internal security breaches, such as critical company data available on employees’ devices during and after their assignment,” Al Chammat told OBG.
The rapid development of the ICT industry in Oman has also created a demand for new skills. One challenge being faced by Oman Broadband Company has been to find contracting companies with the necessary experience to lay fibre-optic cables. Its response has been to provide training for small businesses in the sector. “There are a small number of contractors who are really specialised in these areas, and so as part of our responsibility to small and medium-sized enterprises we are trying to support them to acquire the required capabilities to work in this area,” Al Bulushi told OBG.
The government has also sought to nurture and grow the country’s burgeoning ICT talent by encouraging more technology firms to locate near places of learning. The KOM, for example, was built in 2003 close to Sultan Qaboos University and to two other private education providers, the Middle East College and Waljat College of Applied Science, which teach over 5000 undergraduate and postgraduate students in ICT, engineering and management. Companies at the KOM include branches of foreign ICT companies, start-ups and medium-sized technology firms. A number of initiatives are under way to attract more young Omani graduates and school leavers to ICT careers. Many of the sultanate’s citizens may traditionally have preferred to seek employment in the public sector, but this is changing, and companies in technology, engineering and other creative industries are hoping more will join or even start new businesses in these sectors. According to the NCSI’s “2015 Statistical Yearbook”, 55.9% of the Omani population, and 38% of the wider population, were under the age of 25. It is these young people who are being targeted by one company based at the KOM that has formed a joint venture with the ITA that allows it to operate simultaneously as a training centre and a provider of virtual reality solutions for government agencies and businesses in Oman and the region.
Virtual Reality
ASM Technologies has trained 440 young people over the last four years in computer-aided design and 3D animation, and at the same time it has helped businesses and government departments save money and explain their systems and services more clearly to employees and clients. Elias Tang Abdullah, ASM Technologies’s managing director, told OBG that ASM typically receives 200 applications for 40 places on its three-month training courses, and that the students’ tuition is funded by fees for the commercial projects they complete during their time on the programme. Among the projects they have completed in recent times have been 3D interactive animations showing the intricate workings of an oilfield, the underground irrigation system used in a new date palm plantation and a recreation of how an ancient ruined temple would have looked when it was first built. These animations, used in conjunction with virtual reality headsets, have enabled trainees at other companies to emulate the experience of working in oilfields or farms, and have given tourists insights into a lost world. The use of the technology developed at ASM enabled one oil company to reduce its introductory training course from two years to a year and a half, and so allowed it to make significant savings. Students who attend the ASM course learn new software skills and the soft skills needed to work on complex team projects, and many have used their portfolios to land jobs or freelance work, while others have set up their own businesses. “We select people based on their potential and their attitude, and we take these novices and give them business skills in team building, problem solving, taking the initiative and planning,” said Tang Abdullah. “They don’t have to be graduates when they join us. Indeed, many of our best students have been self-taught school leavers and others have been from other disciplines.”
Outlook
Three years after it was established, the ITA’s Sas Centre for Entrepreneurship at the KOM celebrated the successful completion of the incubation period for seven ICT firms started by young Omani entrepreneurs, the Times of Oman reported in May 2016. Collectively, the seven start-ups generated revenues of OR1.6m ($4.2m) over the three-year period and provided employment for 40 young people. As the sultanate looks to generate rewarding employment prospects for the 1.3m Omanis currently under the age of 25, some working in the ICT sector feel more needs to be done to encourage and support start-ups. “Oman needs more investment in entrepreneurship and innovation,” Fawzi Hamed Al Harrassy, executive director of Teejan Group of Companies, which has interests in IT, told OBG. “We need to make sure we are providing sufficient support and opportunities for younger generations to take over and expand the ICT sector in the future. Oman has an IT sector, but not a IT industry. In other words, Oman is not creating and innovating, only implementing. We need to radically change our approach to the sector so that Oman becomes not just a consumer but also a producer.”
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