Oman is to open up its internet sector to private operators, allowing for an expansion of services and a probable drop in subscription rates.
On May 4, Oman's Telecommunications Regulatory Authority (TRA) announced it was going to allow new operators into the market to provide unlimited access to internet and audio text services.
The TRA will begin accepting applications on June 2 for new internet providers and has already drafted the regulations and procedures that will govern the expanded sector, including setting out the minimum requirements for investment and technical conditions.
As laid down by the authority, companies or entrepreneurs will be able to apply for a Class II licence to provide "additional public telecommunications services" while Class I licences are reserved for the sultanate's main telephony providers. As required under the existing legislation, the new service providers will be able to use the infrastructure of the existing main carriers, paying a regular fee under an access arrangement agreement.
There is to be no time limit on applications, nor on the number of licences that may be granted, due to the fluid nature of the internet services sector, one TRA official said.
Colonel Mohsin bin Alawi al-Hafeedh, a member of the TRA, said the opening up of the market, including allowing foreign companies to operate in Oman, would break down the monopoly of major companies in such services, provide employment for Omani citizens, and allow subscribers to make use of such services through small companies.
Due to the growing demand for internet services in Oman, the TRA expected interest in the new licences to be brisk, al-Hafeedh said in an interview with the local press on May 5.
"From time to time, we have been approached by many prospective licensees who wished to have Class II licences for provision of internet and audio text services," he said. "Some of them may seek to have their own licences in future, and deal with Omantel on the terms and conditions of the access arrangement. So we anticipate vast interest in these licences."
The announcement had immediate repercussions for users. In a move that may help maintain customer loyalty among its 600,000 subscribers, the private mobile telecommunications company Nawras announced it was slashing prices for its internet, e-mail and WAP services by as much as 80%. The new rates were announced the day after the TRA said it was opening up the internet market to new providers.
Liberalising the sector is the latest stage in Oman's push to open up its telecommunications industry, a process that gained pace with the licensing of Nawras, a joint Omani-Qatar venture, in 2005, as the country's second mobile phone operator.
The move, in line with Oman's commitment to the World Trade Organisation to open up the sector, comes at a time when there is also discussion about licensing a second land line operator to compete with Omantel, the majority state-owned fixed telephony monopoly.
Omantel has said it is ready to face competition in both the fixed line and internet communications sectors, having invested more than $260.8 million in the past two years on upgrades and infrastructure.
The TRA has come under fire in the past for clamping down on unauthorised internet telephony operators using internet cafes, with claims that it is protecting the profits of Omantel and mobile telecoms operators Nawras and Oman Mobile. In the latest campaign to halt voice over internet protocol (VoIP) services such as Skype, the TRA warned on March 7 that such services were not covered by present regulations and offenders could face up to two years in prison and/or fines up to $130,000. A similar warning was issued in 2006, prompted by an increase in unauthorised activity by some internet cafes. Currently, only Omantel is authorised to offer VoIP services or work with other service providers under licence.
The opening up of Oman's internet sector is expected to see a boom in subscriber numbers. According to official figures, there are only some 70,000 people living in the sultanate with an internet subscription, a very low pick-up rate for a country of around 2.4 million.
The move is also a part of the policy known as Digital Oman, encouraging the use of electronic communications in daily private and official life. This includes putting many state services online, as well as fostering greater use of the internet and other communications technology for business, education and to help develop a knowledge-based economy.
Jason J. Nash is Head of Research at the Oxford Business Group
(www.oxfordbusinessgroup.com)
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