Omantel gets mobile licence extension for 15 years

Oman’s Telecommunications Regulatory Authority renewed the country’s largest operator Omantel’s mobile telecom licence for a period of 15 years – commencing from February.

A one-time licence renewal fee of 75 million Omani rials (Dh715m) will be charged by the TRA and the amount will be paid in two equal instalments by the company in 2019 and 2020, said Omantel yesterday.

“The renewal includes the spectrum that are currently allocated to Omantel under the existing first-class mobile telecom licence and will not include the 5G spectrum,” the company said.

However, industry experts said the payment of fees, in the set time-frame, could put pressure on Omantel financially.

“Although the licence extension fees on Omantel was expected for quite sometime, this can pressurise the telecom operator’s dividend paying capacity for the next two years, given that the charges need to be paid in two equal instalments,” said Nishit Lakhotia, head of research at Bahraini investment bank Sico.

Omantel’s revenues during the first nine months of 2018 increased to 1.5 billion rials, compared with 406.7m rials during the same period in 2017. The company’s 2018 revenues also included those from Kuwait’s Zain Group, in which it owns a controlling share of 21.9 per cent.

Anticipating local market saturation, dipping subscriber numbers and imminent entry of the third mobile operator in Oman, Omantel had bought a stake in Kuwait’s telecom operator Zain for more than $2.1bn in 2017.

It is Zain’s second-largest shareholder after the country’s sovereign wealth fund, the Kuwait Investment Authority.

Omantel’s customer base, exclusive of resale companies affiliated to the company, declined by nearly 3.3 per cent to 3.4 million subscribers by the end of September 2018, compared to 3.5 million subscribers in September 2017.

However, in a bid to create a competitive atmosphere and to offer superior services at competitive prices, the TRA is expected to announce the third mobile operator in Oman in the coming days.

Yousef Balushi, deputy chief executive for spectrum management affairs at TRA, said the third operator in Oman will be announced early this year.

He said all domains and frequencies for the third operator will be granted the same way as granted to Omantel and Ooredoo. Launched as Oman’s second mobile operator in 2004, Ooredoo broke the monopoly of Omantel, which is still majority owned by the government.

Omantel is also pursuing its cloud computing and data centre ambitions in the region. Last year, it announced a joint venture with the US tech company Equinix to develop a data centre in Muscat, where carriers, content and cloud providers can house their IT infrastructure. Both companies are equal shareholders and the first of three phases is expected to start operations by the second quarter of 2019.