Opportunities abound in the Gulf region’s emerging telecommunications sector, which in the past five years has witnessed staggering growth in mobile phone penetration as competition among telecom operators heated up, says Ross Cormack, CEO of Oman-based telecom firm Nawras.
While mobile phone usage in GCC states has been enjoying an impressive three-digit growth rate, Cormack says the prospects of increasing the subscription base for other telecom services remain very rosy, especially in its home market of Oman.
“In respect of population penetration rates for different telecommunication services with the GCC, the Omani market is now not only considered to be one of the most competitive, but it still has opportunity for considerable growth especially for fixed-line and broadband services,” Cormack said.
A subsidiary of
Qatar Telecom (Qtel), Nawras broke Omantel’s 35-year monopoly in 2005 and within just half a decade, managed to gain 45-per-cent share of the sultanate’s mobile telecom market.
Nawras, having won a fixed licence in 2009, started operating its own international gateway in April 2010, launched integrated corporate services in May 2010 and home broadband and fixed services in June 2010.
Cormack told Alrroya.com that its total mobile customer base expanded to 2.014 million in the third quarter of this year, rising by a significant 12.5 per cent compared to the 1.79 million recorded in the same period last year.
Subscriptions for its recently launched fixed-line services stood at a modest 4,934 as of end-September, but Cormack is optimistic of the product’s potential.
“The launch of our fixed services opens up greater avenues for revenue increases especially in the corporate sector with provision of reliable and integrated voice and data products and services, as well as growth in the international carrier services business and the wholesale of spare voice and data capacity to other Omani network operators and service providers,” he said.
October flotation revives Gulf’s IPO market
In October, Nawras began the process of floating its shares, the second largest initial public offering (IPO) in Oman ever and the first IPO in Oman in two years amid a tough economic climate. Through this move, Nawras helped to breathe a bit of life into the region’s languid IPO market, which took a backseat over the past two years because of the regional slowdown.
In its first day of trading at the Muscat stock exchange on November 1, Nawras IPO raised over $472 million (OMR182m, Dh1.73 billion). Based on the listing price of 702 baisas per share, on its first day of trading at the
Muscat Securities Market (MSM) on November 1, Nawras’ initial market capitalisation was $1.18bn (OMR456m), making it the fourth largest Omani company by market capitalisation.
The shares closed at 740 baisas per share at the end of the November 1 trading with over 8.4 million shares traded, adding a further $1.2bn to the companies’ market capitalisation on the MSM, which represented about six per cent of the total market capitalisation on November 1. Proceeds were purely secondary from the IPO sale, however, and were not linked to Nawras’ expansion plans, Cormack explained.
Instead, the company will finance its capital expenditure for next year “out of its operation and its own facilities with the extension of network, fibre optic and sea cable to enhance increased revenue from international transmission capacity, major reduction in international transmission costs and end-to-end quality control under Nawras supervision,” the chief executive officer said.
Asked whether Nawras has any plans to push its brand beyond its home market, Cormack said there were none.
“Nawras has no plans to expand outside the Sultanate of Oman, however being a part of the Qtel Group gives valuable benefits in terms of sharing expertise and resources, joint product development, opportunities for people development and prudent purchasing power,” he said.
Aiming for greater market share
The Gulf, which has a population of more than 38 million as of July 2010 according to the
CIA World Factbook, offers a fertile ground for telecom operators who are targeting young, tech-savvy consumers.
In a duopoly market such as Oman, where more than half of the over three million population is below 20 years of age and 33 per cent of the population consists of students, competition could be tough, but Nawras is determined to remain buoyant as it seeks to increase its market share.
Cormack said innovation is the key to attracting a wider client base, and they have been tapping this resource through creativity in their promotions and offers as they continue to expand and improve their mobile and fixed offerings in underpenetrated segments.
The company is also looking to increase its share of the business market with reliable, integrated mobile, internet and fixed products and services based on state-of-the art networks. Corporate clients such as
Imtac, one of the leading system integrators in
Oman Air, said Cormack, is already benefitting from Nawras’ new fixed services.
“Nawras has received a number of awards for outstanding customer service and is committed to continuing to provide an excellent customer experience to retain and acquire customers,” Cormack added.
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