MUSCAT, SEPT 7 – Last week’s landmark partnership agreement paving the way for the arrival of global telecom giant Vodafone as the third telecom operator has potentially game-changing implications for Oman’s telecom sector, with beneficial knock-on effects for the wider national economy.
Most notably, it has the potential to fuel the roll-out of 5G, among a host of other cutting edge telecom technologies in the Sultanate, while also intensifying sector-wide competition, according to a Muscat-based telecom industry expert.
“This announcement is quite significant considering that the process of identifying a third operator was in process for quite some time,” said Mohamed Nayaz (pictured), Partner — Advisory Services, Ernst & Young (EY). “This is good for consumers as the introduction of a global operator will introduce healthy competition and enhance the overall user experience and the quality of communications services for the people in Oman.”
On Thursday, the Telecommunications Regulatory Authority (TRA) announced the signing of a strategic partnership pact between telecom heavyweight Vodafone Group and Oman Future Telecommunication Company (OFT). Under the non-equity agreement, the partnership plans to roll out a new mobile network under the Vodafone brand with commercial launch slated during the second half of 2020.
The arrival of a global telecom major has the potential to speed up the pace of change in a number of areas, says Nayaz. “For one, demand for data will increase. There will be growth in B2B services such as Internet of Things (IoT) Cloud, cyber-security, and mega-projects, such as smart cities, and so on. Additionally, the deployment of new access technologies, such as 5G, Fibre, Edge, NB-IoT, and LTE-M, will be accelerated. The demand for reliable, high-speed broadband services from residential and business customers will grow and will be supported by the continuing development of underlying infrastructure.
Furthermore, it will change customer behaviour as the demand for seamless customer experiences grow. Likewise, it has the potential to enhance efficiencies and agilities through the use of Robotic Process Automation (RPA), Analytics, and Artificial Intelligence,” he explained.
Oman Future Telecommunication Company SAOC (OFT) is a consortium of Omani government investment and pension funds (owning around 55 per cent of the equity), with the balance held by private sector investors.
Importantly, the launch of a third telecom operator will also drive mobile penetration growth in the Sultanate, according to EY’s Partner for Advisory Services. “Mobile penetration in comparison to the rest of the GCC shows there is potential for growth,” he said. It currently stands at 134.4 per cent (based on 2018 estimates), versus 133.9 per cent for Bahrain, 153.9 per cent for Qatar, 200.8 per cent for UAE, 116.8 per cent for Saudi Arabia and 152 per cent for Kuwait.
The addition of a third operator into the fray is expected to galvanise incumbents Omantel and Ooredoo into upping their respective games, Nayaz pointed out. “It will enable healthy competition and quicker adoption of 5G by Omantel and Ooredoo.
Also, this will fast track the pace of digital adoption by Omantel and Ooredoo. Digital business models are now a top strategic priority for telecoms operators and play a critical role not only in driving revenues and enhancing customer experience but also to enable cost efficiencies. Adoption of 5G will also enhance the adoption of IoT across verticals such as smart homes, cities, buildings, and so on. This will enable the government and operators to collaborate on smart city initiatives,” he added.