Shares in state-controlled Oman Telecommunications Company (Omantel) jumped 10% on Thursday after Oman cut the royalties the company pays on revenues and prepared to sell shares to a long-term investor.
The royalty cuts would add 9.09 million rials ($23.62 million) to Omantel’s profit in the nine months to September 30, Gulf Investment Services said on Thursday, 12% more than it had forecast.
Omantel shares were up 9.99% at 1.409 rials, the maximum allowed in a single trading day.
Saud bin Nasser al-Shukaili said on Thursday was no longer chairman of Omantel. He gave no details.
Oman said on Wednesday it would cut the royalties Omantel pays to the government for fixed-lined services to 7% of revenue from 10% and for mobile phone services to 7% from 12%. The cuts would take effect in the 2007 financial year.
The government, which owns 70% of Omantel, also said it planned to sell a stake in Omantel, one of two national telecom providers, to a long-term investor to make the company more competitive overseas.
“This, along with the possible synergies from larger players from the region, including the subcontinent, can enhance the shareholders’ value on a longer-term perspective,” Muscat-based Gulf Investment said in a research note.
Omantel is seeking to expand overseas after losing its mobile phone monopoly in 2005 to Nawras, which is 70% owned by Qatar Telecommunications Compay (Qtel), and 40% of its market share in the country of 2.5 million people.
Omantel is able to buy back some of its shares listed on the exchange, the Oman News Agency said on Wednesday, without being more specific.
Omantel said last month it agreed to buy a majority stake in Pakistani wireless local-loop operator World Call. The deal will give it a foothold in the world’s third-fastest growing telecoms market.
(Reuters)
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