Oman has cancelled the sale of a stake in its national telecommunications company, Omantel, blaming "unprecedented market volatility" for scuppering the deal. The sale, announced in July, was originally set to earn at least US$1.5 billion (Dh5.5bn) for the Omani government, based on Omantel's valuation at the time. But its share price has since dropped by almost a third, and potential investors have become bargain hunters.
"Despite the solid progress we have made with the sale process to date, and the continued strong interest shown by the bidders," said Darwish Ismail al Balushi, the secretary general of the ministry of finance, "the unprecedented market volatility and economic conditions that we are seeing globally has led to the government taking the prudent decision to stop the sale process." Etisalat, among others, expressed interest in the sale. Omantel was seeking a strategic partner that would be involved in the day-to-day management and possible rebranding of the company, and set strict criteria that limited bidders to top-tier regional and global operators.
Eight companies from Europe, the Middle East and Asia were shortlisted after the initial application process, with a final decision due to be made in early 2008. The Omani government has taken a number of steps in liberalising its telecommunications system in recent years. The Omantel monopoly was broken in 2005 by Nawras, a new entrant part-owned by Qatar's Qtel. Five new mobile licenses were issued this year for new "virtual" operators, which will run their services using the physical networks of Omantel and Nawras. The Dubai-based Friendi will be one of the new operators.