Oman opens bids for new telecom

Oman's telecoms regulator invited bids yesterday for long-term contracts to build and operate the country's second fixed-line phone network, which would break the monopoly of state-controlled Omantel. Oman invited companies to bid for a new fixed-telecommunications license by Aug 25 as the sultanate opens its phone market to global investors. The license is for local and international phone lines, broadband services, an underwater cable and a landing station for cables, Oman's Telecommunications Regulatory Authority said on its website. About 10 per cent of Oman's residents have a fixed-line phone account.

Oman, which already has two mobile phone operators and is also selling a stake in Oman Telecommunications (Omantel), is liberalising the telecoms sector as part of efforts to encourage foreign investment as its oil production dries up. An official at the Economy Ministry who asked not to be named said Oman was looking for a company that could invest at least US$300 million (Dh1.1bn) in the first five years of the contract. The country of 2.5 million people is offering a package including a 25-year contract to build and operate a second fixed-line service and a similar 15-year contract for broadband internet services. Both contracts are renewable.

"Investors are not bullish about anyone coming in to bid for that licence," said Sagar Patel, an analyst at Bank Muscat SAOG. "Given the topography of Oman, the capital expenditure per subscriber is much higher even for mobile and it would be higher for a fixed-line network." Oman invited bids last month for a 25 per cent stake in Oman Telecommunications, the Gulf state's biggest phone company. The government seeks a strategic partner to strengthen Omantel in Oman and internationally, the Ministry of Finance said July 7. Saudi Telecom, the Arab world's largest phone company, is bidding for the stake in Omantel.

The fixed-line licence, except for broadband access, is for 20 years, with a renewal option at expiry, the regulator said in the statement. The broadband internet license is for 15 years with the right to renew for another 10 years. Bidders for the fixed-line license must have qualifications including more than 300,000 active subscribers for at least two years and minimum assets of $200m, the regulator said. The bidders can have no association with Omantel "in the interest of competition" and must have experience in handling international long-distance services.

Oman has a population of about 2.75 million and a penetration rate of three per cent for internet and broadband services. This "represents an attractive opportunity for an experienced telecommunications operator," the regulator said in the statement. * with agencies