Competition to drive growth in Oman's GSM market

Competition-induced growth will drive Oman’s GSM penetration to over 50% by 2008, according to a new report.

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By  Patrick Phelvin Published  February 11, 2004

Competition-induced growth will drive Oman’s GSM penetration to over 50% by 2008, according to a new report. The new country report from the Arab Advisors Group predicts average monthly revenue per user (ARPU) to drastically decline to US$20 by 2008. The report comes as the process for Oman’s second GSM license goes underway. The Omani government’s efforts to privatise the country’s telecommunications services led to the legal and organisational establishment of Omantel (a government owned company) in mid-1999, which replaced the previous government-owned monopoly General Telecommunications Organization (GTO). Moreover, a framework for liberalising the market is already in place and the second GSM license process is underway. “Oman’s Public Switched Telephone Network (PSTN) and mobile markets are still monopoly markets operated by the government owned Omantel.” Says Rania Masri, Arab Advisors Group’s research analyst. “The mobile sector is slated for liberalisation this year and the TRA has already invited interested parties to submit their Expression of Interest documents for the second cellular license and the winner is expected to be announced by end of April 2004. The Arab Advisors Group expects Omantel to remain the monopoly operator for fixed services until after 2005. We also project cellular revenues to exceed PSTN revenues in the coming five years as voice-based GSM services will become the growth engine in the market, replicating a very similar regional and international trend,” she adds On the fixed front, In 2003, Omantel’s fixed line subscribers dropped by close to 2% in 2003. Oman’s anticipated privatisation of the state-owned fixed line operator followed by the expected liberalization of the PSTN market is expected to result in a modest increase in the growth in the number of PSTN subscribers in Oman, as pockets of unmet demand remain in the country. As for the cellular segment, a major boom in the GSM subscriber base occurred in the year 2001. The subscriber base has been growing steadily ever since and has exceeded the fixed line subscriber base. The Arab Advisors Group projects Oman’s cellular penetration rate to exceed 50% in 2008, corresponding to more than 1.5 million subscribers.

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