Oman invites bids for second fixed-line licence by August 25

Omantel’s fixed-line monopoly will soon come to an end, as the regulator announced yesterday that telcos and consortiums interested in Oman’s second fixed-line licence only have two weeks to submit their bids.

The Telecommunications Regulatory Authority (TRA) invited proposals with a completed bid by 5pm on August 25, with the auction process and licence award expected to be completed by late October.

Oman’s mountainous terrain presents a challenge to the new operator’s infrastructure rollout

The Class 1 fixed-line licence is being offered as a 25-year build-and-operate contract, and a similar 15-year contract for broadband services.

Pre-selection criteria states bidders must have been in operation for more than two years, and have at least 300,000 active fixed subscribers and net assets of US$200 million. Interested parties may be 100 per cent foreign owned with no Omani partner required, however, no association with Omantel is allowed.

Regulatory official, Naashiah Bint Saud Al Kharusi, stated that the provider that plans to invest the most money in the backbone would have the competitive edge in the auction. She added that the successful bidder would have to pay seven per cent of gross revenues to the government as royalty and an upfront fee of OMR500,000 (US$1.3 million) upon selection.

“Initially the new operator can lease facilities from Omantel but we would progressively like the new operator to have its own infrastructure,” Al Kharusi commented.

However, the attractiveness of such a package is arguable, given the mountainous terrain in Oman, which poses challenges to building infrastructure across the sultanate.

Fixed-line penetration currently stands at less than 10 per cent of the 3.3 million residents.

The fixed-line auction is the latest move to liberalise the sultanate’s telecommunications market and encourage foreign investment. Last month the government announced its intention to sell a 25 per cent stake in incumbent Omantel, while five mobile reseller licences were awarded in June.