MVNOs poised for Oman launch

There have been a few false dawns in the short history of virtual networks in the Middle East, but it now looks as though Oman, which issued five reseller licences last year, will be the first country in the region to have an operational MVNO.

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By  George Bevir Published  February 8, 2009

There have been a few false dawns in the short history of virtual networks in the Middle East, but it now looks as though Oman, which issued five reseller licences last year, will be the first country in the region to have an operational MVNO.

Renna, the brand name of Majan Telecommunication, is confident that it will launch by the end of March, but it faces stiff competition from fellow Oman Mobile reseller Friendi.

Friendi Oman CEO Antti Arponen says that that there are four basic requirements of an MVNO; funding, a licence, a wholesale agreement and a distribution agreement, all of which, he says, Friendi has. "There's not much more we need to do," he says.

One of the remaining three companies to have been granted a Class II reseller licence, as the regulator prefers to describe it, is Mazoon Mobile. Although it does not yet have a reseller deal with either of Oman's network operators, CEO Mohamed Alhashili says Mazoon will be ready to launch within 40 days once a wholesale deal is agreed.

Alhashili, who is waiting for a response to his reseller proposals from Nawras and Oman Mobile, says there are a range of possible sections of the market for Mazoon to target, from the low end expatriate communities, locals "below a certain ARPU level", youth, and rural communities.

None of the MVNO CEOs wants to alert their rivals to the segment of the market that they will target, but with Renna and Mazoon choosing to brand their operations with playful cartoon characters it suggests the focus will be on the lower end, youth market.

Renna CEO Niklas Nielsen won't say exactly which segment of the Omani market Renna will target, but he is clear about where the customers will come from saying that after "a lot of time and resources" surveying customers, the majority will be disaffected Nawras customers.

Seemingly in anticipation of an assault on the youth market, Nawras moved to bolster its 44% share of Oman's mobile market with the launch of ‘Shababiah', a youth-focused tariff for 16-25 year-olds which was unveiled in November last year.

Just as the CEOs are reluctant to reveal who they will target, they prefer to stick to vague figures when it comes to discussing how many of Oman's 2.8 million subscribers they want to attract. As with some of their branding, the targets appear pretty similar.

"If you look at Europe and other regions, combined market share of all MVNOs is 20-25% when operating for a few years and we expect that in a five year horizon combined market share will be 20-25% and we hope to have a good proportion, one third of combined market share in five years time," Nielsen says. A 25% share of Oman's mobile market would be 720,000 customers, a third of which would give Renna 240,000 customers.

Similarly, Alhashili says that an MVNO will survive in the Omani market if it can gain between 3-10% of the market, which would be as much as 288,000.

Telecoms analyst and MVNO specialist John Strand says that it will be a battle for all of the MVNOs to survive. "I think it will be tough. We can see from countries like Norway that a few companies are successful and a lot fail," he says, adding that distribution will be key.

"Supermarkets and shopping malls will be an important distribution channel - those who can get access will be able to create a successful business," he says.

The Omani MVNO CEOs all insist that the distribution of their Sim cards and recharge vouchers is taken care of. Nielsen says that Sim cards will be sold at 200 locations around Oman, with recharge cards available from "several thousand" locations. There will also be "two handfuls" of branded Renna shops in the "major populated areas" including Muscat, Salalah and Nizwa once Renna has fully rolled out its service.

Friendi top-up vouchers will be available at "thousands of outlets" according to Arponen, while Alhashili says that Mazoon has signed agreement with some "eight or ten" main distributors and each one of them has a network of dealers giving Mazoon access to 4,000 dealer points in Oman.

Also important to long-term success will be extracting the most amount of value from investments in equipment, premises and expertise through replicating services across the Middle East, North Africa, Central Africa, India, Pakistan and South East Asia are some of the markets earmarked by Nielsen, and Alhashili sees Saudi Arabia as a market that is ripe for an MVNO.

Friendi has established its business with the aim of a pan-regional operation across the SAMENA area, which Arponen says will benefit the nascent network.

"The good thing is that the critical mass of required subscribers in one country becomes very small. Of course, we want as big a customer base in Oman as possible," he says.

But before any of the brands can be moved around the region, the market of Oman must be tackled.

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