Operator eyes growth in fixed-line connections
Broadband will be the main area for growth for Omani Qatari Telecommunications Company (Nawras). Its total capital expenditure (capex) of OR140m ($364m) for broadband investment will be primarily spent on fixed-line infrastructure.
“The distinction between fixed and mobile is evaporating, so it becomes important to have a good fixed-line infrastructure,” says Ross Cormack, chief executive officer of Nawras.
Smart devices, such as tablet computers, use hybrid connections. They can connect to the internet using a wireless connection, but they also have subscriber identity module (SIM) cards to enable them to connect to mobile networks.
“We are investing in broadband because we see it as an opportunity. Over the past few years, growth was in mobile connectivity, but broadband will be the growth of the next few years. It is not an overnight opportunity, it is something to stimulate and sustain,” says Cormack.
Broadband penetration in Oman is relatively low. Fixed-line broadband penetration is just 10 per cent while mobile penetration is 160 per cent. About 25 per cent of Nawras customers use mobile broadband.
The operator posted OR48.1m in revenues in its first quarter results for 2011, an increase of 5.5 per cent compared with the same period in 2010. Net profit reduced to OR12.1m, down from OR14m in the first quarter of 2010 due to an increase in operating expenses (opex) which included OR1.6m spent on network maintenance.
Nawras is a Qatar Telecom- (Qtel) owned operator, which was started up six years ago in direct competition to state incumbent Omantel. Since then, it has achieved 42 per cent of the market share.
In October 2010, the company launched an initial public offering (IPO) that raised OR182m, the second-largest IPO in Oman since 2005. It had also been the largest IPO in the region for 18 months.