UAE’s Etisalat bids for third mobile licence in Oman

MUSCAT: Etisalat Group on Wednesday announced it has submitted a bid for a mobile licence in the Sultanate. This follows similar bids by Kuwait’s Zain Group and Saudi Telecom Company (STC) to become the third mobile operator in Oman.

“The bid is in line with Etisalat Group’s expansion strategy considering the market potential and similarities, footprint proximity to its core market, and likely synergies,” stated a press release.

The qualified bidders will be announced on August 14, 2017, by the Telecommunications Regulatory Authority (TRA), while the winner will be named on September 4.

The regional telecom service providers believe that the Oman market still has room for growth in the mobile segment. The Sultanate, which had a population of about 4.8 million by end-March, had a mobile penetration rate of 151 per cent with 6.87 million users in the fourth quarter of 2016, said TRA.

The vast majority of users were pre-pay customers. Although the telecom service providers have shown robust growth in both sales revenue and net earnings, the recent increase in royalty and corporate income tax may hit the net earnings, claimed a market analyst, on the condition of anonymity.

Zain Group, listed on the Kuwait bourse, announced on Tuesday that it had submitted an offer to bid for the licence. Rival STC had confirmed its application a day earlier, according to a Reuters report.

The TRA had announced last year that it was inviting bids for what will be the first mobile network operator licence, after Oman awarded a licence to Ooredoo Oman, which started operations in the country in 2004.

Oman Telecommunications (Omantel) and Ooredoo Oman each have a market share of about 41 per cent, with virtual mobile network operators holding about 17 per cent.

According to research firm IDC, the sector is expected to be worth more than $700 million in Oman next year, up from $590 million in 2015. “Despite the economic woes and oil price fluctuations, the Omani telecoms market has witnessed relatively healthy growth,” said Dubai-based IDC lead analyst Paul Black.

Zain operates in eight countries in the Middle East and Africa, while Saudi Arabia-based STC has subsidiaries and joint ventures in the Middle East and Asia.

Omantel, which has operated in the country since 1970, and Ooredoo Oman both reported declining first-quarter profits, citing higher royalties and tax rates.