Oman and Emirates

Competition in Hub Function for Middle Eastern Telecoms

As a relatively neutral country, the Sultanate of Oman is building up a regional centre for telecom connections. National operator Omantel is claiming this position and earlier this year, it established a European connection via Ams-Ix in Amsterdam. *)

Omantel had 2.2 million mobile subscribers of its own on September 30th. In addition, it boasted close to half a million subscribers via mobile resellers. Around 85 per cent of customers have prepaid accounts. The figures for fixed telecom are less impressive, with 243,000 subscribers.

The same picture emerges for broadband. On September 30th Omantel had only 50,000 fixed broadband subscribers, but 292,000 mobile broadband customers. Mobile broadband growth was 52 percent over the first nine months of 2011 compared to the first nine months of 2010.

Omantel supported the Information Technology Authority (ITA) with its National PC Initiative. The objective was to increase the ownership and usage of personal computers within certain segments of the Omani population (e.g. social welfare, students and teachers). As part of this initiative, Omantel provided free Internet service for up to one year.

Omantel has one competitor in both the fixed and the mobile market: Nawras. The latter is mainly owned by Qatar Telecom (Qatar). The company started mobile operations in 2005 and fixed lines in 2010.

The fixed line market share of Omantel is still 94 percent and the revenue share totals 86 percent. In the mobile market, Omantel has a network share of 57.3 percent, and of 60 percent in terms of revenue. Nawras has 43 percent of the mobile market and 6 percent of the fixed market. With relatively more business customers, Nawras achieved 14 percent of fixed telecoms revenue.

Omantel’s revenue for the first nine months of 2011 was 333 million Omani Rial, approximately 620 million euro. Net profit mounted to 82.7 million Omani Rial (155 million Euro). The profit margin was therefore healthy with 25 percent quarter-on-quarter.

Of the total revenue, roughly 25 percent comes from fixed lines, 55 percent from mobile and 20 percent from wholesale. Wholesale fluctuates greatly: within one year from 17 to 25 percent of the total revenue.

CEO of Omantel is Dr Amer bin Awadh Al-Rawas. The company is listed on the Muscat Securities Market and is the most widely spread share in Oman.  In October 2011, Oman Mobile and Omantel merged following AGM approval.

Via Amsterdam

"Most of the content that we need to deliver to our customers comes from Europe. We were therefore in need of a direct connection to Europe in order to improve the quality of IP traffic in this direction. We made a selection of the main internet exchanges available in Europe to compare the parties, the possibilities, the types of organization, the quality of service and price," explains Johannes Boersma (photo), Senior Manager Business Relations & Agreements - Wholesale Unit at Omantel

Omantel reviewed the London Internet Exchange (Linx), Deutsche Internet Exchange (De-Cix),  French Internet Exchange (Sfinx) and Ams-Ix. On balance, Amsterdam seemed the most favorable option. "In particular, we focused on the way in which these membership associations were organized and the number of other parties with which it was possible to peer. These considerations pointed in favor of Amsterdam, as did the price. So the final decision was not so difficult", stated Mr. Salim Bader Al Mazrui, General Manager Information Technology Division - Omantel.

It was the first point of presence for Omantel outside the Sultanate. Omantel also acquired its own equipment within the Ams-Ix. In the words of Boersma: "We started at Ams-Ix with a connection of 2 Gigabit Ethernet for about 500 euro per month for the port, plus 45 euro per month for the in-house patching per GbE."

In Amsterdam, Omantel also has direct connections to Cogent and KPN. "Cogent is significant - we learned that a substantial amount of traffic passes via this company. Omantel is exploring the possibility of connecting with Tier 1 parties, including TeliaSonera & Level-3, because we hope to sell IP Transit in this region."

Middle Eastern Hub

Omantel intends to grow as a provider in the field of international IP transit. "We currently have only one serious customer, but we want to expand these kind of services to attract more clients in this region. We aim to become the regional hub for the Middle East,” states Boersma.

This is a new strategy. Initially Omantel was not focused on that particular segment of the market. However, when they entered into discussion with one of the biggest content providers in the world, they became aware of the opportunities. "We have just signed with a party, the name of which cannot be divulged. They have chosen Oman and Omantel as their regional hub, which is a very important starting point."

Many parties want to connect to this huge internet company and Omantel is able to offer them additional international IP connectivity. "We want to become more visible in the international market. Four years ago, there were only three submarine cables available: SMW-3, FALCON and TW-1. We were given approval to invest in more submarine cables to improve connectivity into the region. Since then, we have signed up with EIG, MENA, GBI and POI.

We have agreed to the expansion of our national systems. These also form part of the important EPEG cable system (Europe Persia Express Gateway), with TIC from Iran, Cable & Wireless from the UK and Ross Telecom from Russia. When EPEG is RFS, we can provide connections from Oman directly to countries including Iran, Russia and Germany.”

Political influences

Political constraints play a significant role in this region. Oman can profit from the situation because it has a very neutral political profile. "The Sultanate of Oman is known as a neutral and peaceful party in the Middle East. This is also favorable for business reasons. We can become the neutral, independent regional hub for the region."

Competitors for this hub function are Saudi Telecom Company, Etisalat and Du, the latter two from the UAE. According to Omantel, however, they do not share its neutral profile.

*) This article has been sponsored by AMS-IX, who influenced neither the realisation of the text or the final version

Competition in Hub Function for Middle Eastern Telecoms


19 feb 2012

Registreren en de nieuwsbrief ontvangen?

We gaan zorgvuldig met je gegevens om. Je krijgt ook gelijk toegang tot alle plusartikelen en je kunt reageren op de artikelen.

asdas sdf fs dfsdfsf sdffsd

Netkwesties © 1999/2023. Alle rechten voorbehouden. Privacyverklaring

Ehio Media content marketing