Ross Cormak, CEO, Nawras

Telecoms.com caught up with Ross Cormak, CEO of Omani operator Nawras at the recent GSM>3G Middle East Telco World Summit in Dubai.

What are the main points you will be making in your presentation?

With this new license we will be able to provide a one stop solution to all customers whether corporate, SME or residential. We will also be able to bundle these fixed and mobile services to meet different customer needs. There is a vast unquenched desire for broadband in the Sultanate so over the next few years we foresee a similar growth as we have seen in mobile. Because we shall be utilising WiMAX fixed wireless technology we shall have the flexibility to quickly focus our service availability to meet customers’ fast changing needs.

We are building an extensive broadband backbone network which will take us close to most businesses and all new residential developments in the Sultanate which is critical for providing broadband capacity. Our own international gateway with our own international cables will enable us to provide capacity and choice of quality as well as unique, new value added services.

How is the global recession affecting the Middle East telecoms market?

It appears that the impact of the global slowdown on the telecom market in the Middle East has varied with different countries. I am delighted to say that in the Sultanate of Oman, the impact has been limited. This is due in part to the Government taking bold and inspired steps to ensure the continued growth of the economy including maintaining investment levels for new infrastructure and large scale development projects. Also, with a high ratio of nationals and largely unaffected expatriates, there has been little change in terms of population migration. Finally, as telecommunication has become a basic need, the usage pattern of our customers has not altered to any large extent as they continue to use Nawras to get closer in good times as well as in those less rosy times.

On November 3, local press reported that International Monetary Fund experts had hailed the economic policies adopted by the Sultanate which provided financial ability and helped in the implementation of the development programmes in all fields.

What effect are the first MVNOs to launch having on the region’s mobile market?

Two resellers launched early this year and their initial target has been the expatriate community from South East Asia and to a lesser extent, the youth market. Nawras had already successfully launched Shababiah a year ago to serve the latter segment and with the Sultanate’s mobile penetration already above 100 per cent, the impact of the resellers is seen mainly as an increase in use of multi SIMs. In October, Nawras signed two reseller agreements with Mazoon and Samatel respectively, in what was described as a win-win situation for the newcomers using the reliable Nawras Network.

Nawras continues to see its customer base growing at a very healthy rate and benefits from the knock-on effects of increased advertising and promotional activities attracting greater interest and bringing more attention to mobile services.

With so many Middle East markets exceeding 100 per cent mobile penetration, where do you see future growth opportunities?

Being the first operator in Oman to launch mobile broadband, Nawras has experienced a fast growth in this area during 2009.  Data services together with related content and community services continue to grow rapidly.  The key is to identify the new services that will enhance a customer’s utilisation of mobile technology through a pleasingly different service.  The ability to segment the market and tailor attractive offers is paramount to continue growing value when most of the market is already connected.

Wind of change lifts Middle East MVNOs

Following the launch of the Middle East region’s first MVNOs – Friendi Mobile and Renna in Oman earlier this year – winds of change appear to be blowing through a market once reluctant to accept virtual operators.

The Sultanate of Oman is certainly leading the charge, having signed yet another MVNO agreement with Mazoon Mobile in October, a service provider which entered its third week of operation as the recent GSM>3G Middle East Telco World Summit kicked off.

“The mentality of the incumbent operators has shifted a great deal and perception has changed,” said Mohamed Al Hashili, CEO of Mazoon Mobile, which piggybacks on the Nawras network. “So today we are true partners, working hand in hand for the benefit of both parties.”

Mikkel Vinter, CEO of Friendi, which started operations in partnership with Oman Mobile earlier in the year, supported Al Hashili’s remark. “The whole attitude towards the MVNO model has changed in a positive direction in the past year. Operators now more open to discussing deals and we are able to engage with operators across the region,” he said.

Regardless of whether they are open to the MVNO model, operators are certainly curious. Speaking on the panel discussion on the Impact of MVNOs in the Market Place yesterday, Phillippe Vogeleer, chief strategy officer for Orange Jordan, agreed that the sentiment towards MVNOs has changed, but perhaps not for the same reasons.

“Looking at Oman gave us something concrete, something tangible to study,” he said, admitting a positive outcome from this research. “We thought that maybe in some markets segments we are not as effective as we could be and we could use someone to help us.” This is where the MVNO, which typically targets niche markets underserved by the network operators comes into play. “But the fear is that the MVNO could go from helpful as a way to target niche markets to being very successful and even become a competitor.”

In 2007 and 2008, the Middle East and Africa have boasted the highest broadband subscription growth rates in the world. For technologically and economically advanced nations universal access to broadband services has become an integral part of economic policy. Just look at the amount of press broadband has been receiving in Europe. So it no real surprise that governments in the MENA region are also seeing the availability of broadband services as essential to a healthy and a stable economy for the future, especially in the face of recent recessionary trends experienced around the world.

Let’s not judge the region on its questionable past in terms of telecoms infrastructure development. There’s another incentive for MENA governments to improve their broadband infrastructure in terms of its importance as a necessary educational tool that can spur national development and innovation.

Mobile has had the edge for years. It was easier and cheaper to deploy. However, saturation in the mobile market has begun to have a positive impact on the fixed side with operators recognising the importance of having multiplay strategies to more effectively compete. A major change is already under way and technologies such as FTTx have a bright future, largely due to the high demand from greenfield projects, especially in the Gulf Cooperation Council countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. FTTx technologies in the Middle East and North Africa have a 1.7% market share, relatively high compared with Europe, where FTTx had 1.5% at end-2008.

Demand for bandwidth is increasing due to demand for media both managed and “over the top” (i.e third-party, iPlayer for instance, delivery of video that bypasses a broadband provider’s pay-TV distribution services and goes directly to the consumer) throughout the region. However, the vast majority of residential access users require higher access speeds, mainly for basic applications such as e-mail, surfing and linear downloads.

Find out more about Informa Telecoms & Media’s latest research on the MENA region

Nawras wins fixed line licence in Oman

Second placed Omani mobile operator Nawras has been issued a fixed line licence, the company said on Tuesday.

Nawras, which is majority owned by Qatar Telecom, is now licensed to provide fixed, data and international telecommunication services in Oman, and can use its network infrastructure to offer WiMAX and HSDPA services, the company said. The licence is valid for 25 years.

Since its launch in 2005 as the second operator in Oman, Nawras has won over 1.6 million GSM customers and claims to have achieved a market share of more than 45 per cent by the end of the first quarter of 2009.

Nawras’ extension into fixed line and consumer broadband services complements the Qtel group’s strategy to grow its operations across dedicated business lines, as part of its objective to become one of the world’s top 20 telecoms companies by 2020, Qtel said.

First MVNO launches in Middle East

The Middle East’s first mobile virtual network operator (MVNO), Friendi Mobile, launched in Oman today, setting in motion what industry watchers expect to be a trend for the region.

A second MVNO – Renna, expected to launch services soon, will also piggyback on the network of incumbent operator Omantel, which has suffered a significant loss in mobile market share in the face of competition from second placed operator Nawras.

Analysts at Informa Telecoms & Media believe there are good opportunities for MVNOs in the Middle East, particularly in the GCC states (Gulf Cooperation Council, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), where there are large expatriate communities.

Figures from the United Nations reveal that there were 12.8 million non-nationals in the GCC states in 2005, accounting for 36 per cent of the total 36 million inhabitants in the region. India is the single largest contributor of expatriates in the GCC area, but there are also sizeable expatriate communities from Bangladesh, Pakistan, the Philippines and Sri Lanka.

“There is a clear opportunity for MVNOs in the Middle East to offer the sizeable expatriate communities here customised services with features such as call-centres that are available in their own language, and value-added services including content offerings that cater for their interests and backgrounds,” said Matthew Reed, senior analyst for Middle East and Africa, at Informa. “Significant numbers of people within these groups are also likely to find the offer of discounted calls – both local calls and international calls – attractive so that is another area that MVNOs should look at.”

Reed expects that the progress of MVNOs in Oman will be closely watched across the region, by operators, regulators and potential MVNOs. Jordan has also advanced legislation to pave the way for MVNOs, but none of the country’s three GSM operators have so far been willing to host MVNOs. Bahrain, Israel and Turkey are also discussing legislation to allow MVNOs to enter their markets.

Nevertheless, the analyst expects the MVNO market in the Middle East and Africa to remain modest in size for some time. Informa predicts there will only be 2.65 million MVNO and reseller subscriptions in the Middle East and Africa at the end of 2009, rising to 3.77 million at the end of 2013, with South Africa likely to remain the largest single MVNO and reseller market in the region.

Community-targeted services, which focus on ethnic or national groups, are the second largest category of MVNOs worldwide, accounting for 20.2 per cent of MVNOs globally in 2007, according to Informa. But MVNOs also offer an opportunity for companies from other sectors – such as retail – to move into the telecoms services market. In the Middle East, mobile handset and devices are usually sold by independent retailers rather than by the operators, opening up an opportunity for those handset retailers to become MVNOs and extend their relationship with customers.

In Europe, supermarkets have been among the most successful MVNO operators and it’s possible that experience could be transferred to the Middle East. The Carrefour and Ikea chains, which both have a presence in the GCC, also operate MVNOs in Europe.

Meanwhile, in the United Arab Emirates, Etisalat has announced plans to roll out Nokia’s Ovi platform to help boost mobile internet services in the Middle East. The promoted services include maps, navigation and games on Nokia devices.

Subscribers to Ovi Maps and purchasers of N-Gage games can now choose to combine their payments for these services with their Etisalat account. In the future, Nokia said it will extend its partnership to other Etisalat operations in the Middle East and Africa.

A consortium including Hong Kong operator PCCW and a local investor has won a fixed line licence for Oman, the country’s communications regulator said over the weekend.

The Oman Telecommunications Regulatory Authority announced the award to Awaser Oman Consortium, which achieved the highest marks in the technical and commercial evaluation as well as the financial bid.

The licence award marks the opening up of the Oman market to overseas investors, as well as the second fixed line licence to be awarded in the country. Oman has a population of approximately 2.75 million and the local regulatory authority estimates the current fixed penetration rate at 10 per cent.

Broadband is at a very low penetration of just 3 per cent, representing an attractive opportunity for new entrants, the Regulatory Authority said.

Oman has opened bidding on a new fixed line telecommunications licence to be made available in the country, opening up the market to overseas investors.

Oman has a population of approximately 2.75 million and the local regulatory authority estimates the current fixed penetration rate at 10 per cent.

Broadband is at a very low penetration of just 3 per cent, representing an attractive opportunity for new entrants, the Oman Telecommunications Regulatory Authority said.

The regulator said that potential bidders should comprise an operator or a consortium led by an operator, with a minimum of 300,000 active fixed subscribers in operation for a period for at least two years.

The deadline for bids is August 25.

The governemt is also in the process of selling a 25 per cent stake in Omantel, the incumbent fixed line monopoly.