Muscat: Oman Telecommunications Company (Omantel) on Thursday said it is investing $31 million in the construction of a landing station for the Asia-Africa-Europe submarine cable network (AAE-1) in Marseilles, France, which is going to be the first such station operated by Omantel outside Oman.
The landing station, which is part of the transnational submarine cable network which traverses South East Asia to Europe and across Egypt, while connecting several countries, will be ready in 2015.
"The consortium has conducted an auction for (selecting an operator for the landing station) on the basis of technical and commercial capabilities. We have successfully won the bid," Talal bin Said bin Marhoon Al Mamari, chief executive officer of Omantel, told journalists here on the sidelines of a forum to discuss the company's first half year performance.
"Our share in the consortium is $40 million, and the investment for the landing station alone is $31 million, taking the total investment to $71 million. This is going to be the first (submarine) landing station that we are going to own and operate outside our geographical territory," he added.
"We expect a new business relation in Europe, since we will be able to serve operators in Europe and the rest of the world through the landing station. It also opens a new door to the wholesale business," noted Al Mamari.
He added that the consortium members of the Asia-Africa-Europe submarine cable are well-diversified and include operators from China, Hong Kong, India, the Middle East and Europe. The starting point of the submarine cable network is Singapore, with the ending point being in France.
A central hub
Elaborating on Omantel's strategy to become a carrier for other carriers, Al Mamari said the company is now part of nine transnational submarine cable networks, as opposed to three in 2009.
"Omantel will have a stake in 11 such transnational marine cable networks by 2015," said the Omantel chief, adding, "We are aiming to make Oman a central hub, connecting east with west. The strategic location and political stability are two major factors that helped Oman attract landing stations to the country."
Also, the company is serving a number of operators in the region and outside, including those from Iran, Yemen, Asia and Europe.
Al Mamari noted that mobile broadband is a focused growth area for the company this year. "The growth in mobile broadband was approximately 28 per cent in the first half of this year, over the same period in 2013, and the market is likely to continue at the same growth pace," he said.
Al Mamari added that the company has been investing some 17.5 to 18.4 per cent of its revenue in upgrading its network and other expansion programmes, which will continue. However, he noted that the pay-back period of investment in mobile networks is increasing, compared to past years.
Additionally, Omantel's group net profit was OMR66 million in the first half of 2014, against OMR60.5 million in the same period last year. The company's revenues stood at OMR238.6 million as of the end of June 2014, compared to OMR239.3 in the corresponding period of 2013, and the group's net profit margin was 28 per cent in the first half of 2014.
Omantel group's customer base, including Worldcall, has reached 4.170 million, as of June 30, 2014, compared to 3.953 million in the same period in 2013, seeing a growth of 5.5 per cent.
Al Mamari said his company's dividend yield at 7.6 per cent is one of the largest among MSM-listed companies and other telecommunication service providers in the region. Omantel's market capitalisation has reached OMR1.2 billion, while its price-earning ratio is 9.27 per cent.
Omantel's mobile subscriber base has touched 3.487 million, which indicates a market share of 59.1 per cent and 61.4 per cent in terms of total revenue in the sector. Further, the company has a market share of 85.6 per cent in the fixed line subscriber base throughout the country.
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