Omantel embarks on privatisation drive

Oman’s ministry of finance has today announced that bidders interested in bidding for a 25 per cent stake in state telco Omantel will need to submit expressions of interest by July 18.

The sale will reduce the government’s shareholding to 45 per cent.

The partial sale of the Omani incumbent, 100 per cent of which is valued at US$4.4 billion (as of July 2, 2008), is expected to be completed during the fourth quarter of this year.

Omantel is the sultanate’s sole fixed-line provider, and also provides mobile and Internet services.

Ministry of finance secretary general, Darwish Ismail Al Bulushi, said: “The Omani telecoms market still has excellent growth potential and Oman offers an attractive economic environment that we are certain will appeal to bidders”.

Al Bulushi said the government may also consider providing the selected strategic investor with “certain rights enabling it to increase its economic and voting exposure to Omantel in the future”.

Interested telcos must satisfy the following prequalification criteria before submitting an expression of interest:

• Be able to provide sufficient expertise as an integrated telecoms operator to substantially contribute to the management and growth of Omantel, both organically and via international expansion
• Have substantial experience in operating fixed-line and mobile services
• Have an operational presence in multiple countries
• Provide telecoms services to a minimum of five million active subscribers, including a minimum of two million active subscribers in a single market
• Financial capacity that meets certain stated minimum criteria on capitalisation, assets and revenues
• The interested party (or consortium) must also retain its stake in Omantel for at least five years

UAE-based provider Etisalat said last October it was considering acquiring a stake in Omantel.

Between 2005 and 2007, Omantel’s subscriber base grew 14 per cent year on year, while revenues grew 16 per cent to US$950 million at the end of 2007. EBITDA grew 21 per cent year-on-year to US$502 million at the end of the same period, while net income grew by 29 per cent year-on-year to US$293 million, the operator said in a statement.

This sale will reduce the government’s shareholding from 70 per cent to 45 per cent.