Oman awaits reseller agreement announcements

Sources in Oman suggest that one of the incumbent mobile operators, Oman Mobile, has selected two out of the country’s five resellers to partner with. It is understood to be just a matter of time before the service provider confirms the names of the two licensees, and the expected time-line for their entry into the Omani mobile market.

At the end of June, Oman’s TRA confirmed the issuance of five Class 2 licences in the sultanate, allowing the resale of basic mobile services. Friendi Mobile, through a bidder called Arab Link was awarded one of the five-year licences, together with Injaz International, Kalam Telecommunications, Majan Telecom, and Mazoon Mobile. Each licence costs OMR2,500 (US$6500).

The reseller licences, which are akin to mobile virtual network operator (MVNO) concessions require a commercial agreement with one of the existing operators, Oman Mobile or Nawras, whereby the licensees are permitted to resell basic mobile services having bought airtime from the network operators in bulk. The services offered by the resellers can then be rebranded and offered to subscribers at local rates.

Market commentators have suggested that not all five resellers are likely to become viable propositions, or may in fact come to market, with room for a maximum of three possibly surviving in the Oman telecoms market.

Given the relatively small size of the Omani population and the effective development of telecoms services by the two licensed network operators, there has been some scepticism about the prospects the five resellers face in the market. As a benchmark, it is estimated that attracting a base of at least 100,000 subscribers is necessary for an MVNO/reseller to achieve the economies of scale necessary to sustain a viable business.

Niklas Nielsen, CEO of Majan Telecom remains convinced that the Omani market represents a good opportunity for the investment by resellers.

“In terms of the viability of a reseller in Oman, I agree with the overall benchmark figure of 100,000 subscribers as break even point,” Nielsen told Comm. recently. “I am quite surprised if anyone would think it is unlikely for a reseller to gain 100,000 subscribers within five years in Oman,” he added.

Majan Telecom plans to operate in Oman under the brand ‘Renna’, which means ‘to ring’ in Arabic. A common Arabic phrase is “abu renna”, which refers to a missed caller, and Nielsen commented that his company’s target market could be identified through this pattern of behaviour of people who leave missed calls in order for the other party to call them back.

“It would be foolish of me not to say it is important to be one of the first two resellers in the market. If you are not in the first two, perhaps it would be better to delay launch, accept that you are not one of the first, and launch later with something completely unique.”

Second mobile operator Nawras, which currently enjoys a 44 per cent market share, is believed to be less-advanced in its negotiations with potential reseller partners. It had been expected the leading reseller would launch by year-end, but without confirmed agreements, this may not be an achievable timeframe.

“The regulation requires that a deal be agreed between the network operator and the reseller within a certain period of time. It is incredibly frustrating that in some cases this period of time has been surpassed,” the source revealed.