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Mon 22 Aug 2011 06:04 PM

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Omantel on lookout for new operating licences

Oman telco keen to expand its network building contracts abroad, says company CEO

Omantel on lookout for new operating licences
A visitor takes pictures with his mobile phone as he stands next to an artwork to be auctioned off by Sothebys at Arts of the Islamic World during a preview exhibition at a hotel in Doha

Oman Telecommunications Co's (Omantel) is on the lookout for operating licences and network building contracts abroad as competition in the sultanate's mobile telecom sector gets tougher, its chief executive said.

"What we are trying to do right now is to expand abroad and pursue opportunities for licenses," Amer al-Rawas, Omantel's CEO, told Reuters in an interview.

In June, the state-owned carrier, which also builds networks, signed an agreement with Iran's Telecommunication Infrastructure Co, Cable and Wireless Worldwide and Russian state telecoms giant Rostelecom to construct the Europe-Persia Express Gateway (EPEG) cable system.

"The second way of expanding outside is for us to build more and more cable systems and then be able to link other operators to become the carriers of carriers," he said.

The system, which will be put in operation in May 2012 and have an initial capacity of 540 gigabits per second, will connect Frankfurt across Eastern Europe, Russia, Azerbaijan, and Iran to Oman's capital Muscat. It will eventually carry both voice and data traffic.

The EPEG will span 7,000 kilometres and investments of consortium's members will amount to around $200 million.

"This gateway allows us access and capacity to countries in Eastern Europe and carry traffic should anything go wrong in the Mediterranean cables going through the Suez Canal," he said.

In 2008, Egypt and other countries in the Mediterranean region and Middle East suffered large-scale internet outage and disruptions after key undersea cables were cut.

Omantel's mobile network market share grew to 56.1 percent in June this year from 54.1 percent in December 2010. The total number of Oman mobile network subscribers reached 2,569,993 at the end of June, the company said.

"Drivers right now for our growth and revenue is broadband. We are doubling the number of mobile broadband subscribers," Rawas said. "We're also growing in terms of usage on home broadband DSL."

Small non-OPEC oil producer Oman, which faced several public protests this year demanding more jobs and an end to corruption, has a population of around 2.7 million people of which 70 percent are nationals.

The sultanate's mobile penetration was 165 percent by the end of June 2011, according to data from the Oman Telecommunications Regulatory Authority, the most recent available.

Fixed broadband penetration in Oman was less than 2 percent in 2009, but mobile broadband penetration was 43 percent, according to the International Telecommunications Union.

In 2006, the monopoly of state-controlled Omantel was broken by Nawras , a unit of Qatar Telecommunications Co, boosting competition among mobile network operators in the country. The government owns 70 percent of Omantel.

Nawras, which has a 42 percent share of Oman's mobile market, posted a fall in second-quarter net profit of 13 percent, missing forecasts.

Omantel made a net profit of OR29 million ($75.3 million) in the second quarter, unchanged from a year-ago.

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