Developing Telecoms | Growth in Oman stymied by political unrest – but only in the short term

22 May 2012

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Growth in Oman stymied by political unrest – but only in the short term

Wednesday, 13 July 2011 10:50 | James Barton

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Oman's progression up industry ratings tables was halted this quarter on the back of heightened political and industry risks from the social unrest in the Middle East and North Africa region. However, as relative peace returns to the country, the long term impact of the ‘Arab spring’ crisis is expected to be minimal, according to BMI Research.

Based on the latest data, it appears Oman had 1.847mn 3G subscribers at the end of 2010, equivalent to 40.5% of the entire mobile customer base. Meanwhile, in the fourth quarter of 2010, the mobile subscriber market grew by just 0.8%, according to the regulator. This was one of the slowest growth quarters ever recorded for Oman’s mobile market.

One likely reason for the slow growth in Q410 was the impact of a switch-off period for inactive customers, which begun to be felt in operator results in Q310. Although Oman’s mobile operators had not published subscriber data at the time of writing, it is probable that at least one of them experienced negative growth in the fourth quarter of the year.

Growth in the number of mobile broadband subscribers – i.e. customers who use a 3G-enabled mobile device or USB stick to access the internet – is likely to fall short of expectations. Media reports suggested national incumbent operator Omantel had 156,000 mobile broadband subscribers on its network at the end of September 2010. Considering that alternative operator Nawras introduced its mobile broadband offering before Omantel, Nawras is understood to have an even higher number of mobile broadband subscribers on its network. Oman had an estimated 388,000 mobile broadband subscribers at the end of 2010 - equivalent to 89.5% of the entire broadband market.

Accounting for fixed and mobile broadband subscribers, Oman’s penetration rate at the end of 2010 was likely around 15%. The growth of mobile broadband services is expected weaken demand for fixed broadband alternatives, with demand for Omantel’s xDSL service already experiencing a slowdown.

However, the launch of WiMAX-based broadband services by the Nawras network increased the competitiveness of the fixed broadband sector and could help stimulate further growth. Described as a Plug 'n' Play solution, Nawras’ home broadband service is based on WiMAX technology in the local loop, but supported by a national fibre-optic backbone. The Nawras Home Broadband & Voice allows customers to set up internet access at download speeds of up to 1Mbps.

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