x Abu Dhabi, UAESaturday 22 July 2017

Third Omani telecoms licence is a surprise

Sama Telecommunications has won Oman's third telecoms licence, according to a decree issued by Sultan Qaboos bin Said.

Investors in Oman's telecommunications market are treading carefully following the surprise announcement that a third operating licence was awarded this week to a new player in the country.

Sama Telecommunications won Oman's third telecoms licence, according to a decree issued by Sultan Qaboos bin Said, the ruler, on Sunday.

"Issuing a first-grade licence for Sama Telecommunications for the setting up and operation of a system to provide general international telecommunications services for 15 years," said the decree, carried by the state news agency ONA. ONA did not disclose the value of the licence awarded to Sama or any further details.

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Sama Telecommunications is a mobile virtual network operator (MVNO) that has been offering services in Oman since last year. An MVNO company functions by partnering an incumbent telecoms operator to purchase voice and text packages at wholesale rates and create bundled offerings that are sold back to subscribers. The new licence allows it to offer traditional mobile services.

News of the third licence was a surprise to analysts and investors and sent shares of the country's two listed telecoms companies down. Nawras lost more than 13 per cent in the first two days of the week before gaining back 8.9 per cent yesterday to close at 735 baizas per share. Oman Telecommunications (Omantel) shares were down 5.8 per cent in the first two days of the week but regained 4.3 per cent yesterday to 1.2 rials on the Muscat Securities Market.

Irfan Ellam, a telecoms analyst with Al Mal Capital, said investors should wait for further clarity on Sama's business plans before making a move in the market.

"This is a bit of a surprise for the market. A third licence was not expected," Mr Ellam said.

"With a third licensee, if it is a mobile operator, it has implications for the revenue and profitability of the incumbents."

dgeorgecosh@thenational.ae