Mobile broadband set to take off in Oman

What's Up: Oman's telecom sector is expected to benefit as the market matures and mobile broadband becomes more popular, HC Alembic Securities said yesterday.

Oman's mobile broadband penetration was 13.8 per cent last year. AFP

Oman's mobile broadband market is expected to triple in the next four years, benefiting its two telecommunications operators as data services become more popular.

Broadband has been slower to take off in Oman than in some of its Gulf neighbours, partially because of the late entry of 3G services. Nawras won its 3G licence in 2008, with Omantel following a year later.

"We see big potential from mobile broadband in Oman," said Karim Khadr, an analyst at Alembic HC Securities in Dubai.

Oman's mobile broadband penetration was 13.8 per cent last year, lower than the average of 41 per cent in most other GCC and developed countries in 2009. But Mr Khadr expects mobile broadband in Oman will grow to 43.5 per cent by 2015.

Both operators are competing on the mobile broadband prepaid front, with a standard daily rate offer of 1 rial for usage of up to 1GB per day from Nawras or unlimited internet from Omantel. However, since a heavy broadband user is not likely to exceed 1GB per day, the offers seem practically the same, Mr Khadr said.

Nawras also has two monthly offers that cater to the average mobile broadband user, the 200MB SmartphoneLite at 4 rials a month and the 400MB Smartphone-Surfer at 6 rials a month.

Both offers have speed and spending caps and are pitched towards cost-conscious users who access the internet less frequently.

"We believe that both operators will focus more on the broadband segment and will therefore start offering a variety of data plans, which will help grow MBB [mobile broadband] subscribers and usage," Mr Khadr said.

He initiated coverage on Omantel with an overweight rating and target price of 1.41 rials a share. He also started Nawras at an overweight rating with a target price of 0.86 rials. Both operators exhibited superior margins of 54 per cent last year, 10 per cent above the GCC average.