Oman’s wireless market is shifting thanks to the growing popularity of MVNO services.
The Sultanate is home to two established network operators – Omantel and Ooredoo – as well as a pair of low-cost, pre-paid resellers in the shape of FRiENDi Mobile and Majan Telecommunication, which trades under the name Renna Mobile.
FRiENDi and Renna arrived on the scene in the second quarter of 2009, claiming to be the Middle East’s first commercial MVNOs.
The pair had an immediate impact. By mid-2010 – just over a year after launch – they managed to capture 8% of the country’s mobile users; by mid-2016 this figure had doubled to 16%.
FRiENDi is the larger of the two, with around 630,000 customers by end-June 2016. Renna could claim approximately 440,000 at the same date.
Growth of reseller customers is far outstripping demand for the services of the two network operators; in the 12 months to end-June 2016, the combined subscriber base of the MVNOs rose by an impressive 30.4%, while Omantel and Ooredoo together registered an increase of just 0.1%.
Both Renna and FRiENDi are expected to continue to experience strong subscriber growth, spurred on by their launch of 4G services in May and June 2016, respectively. Both companies use Omantel as their host network.
Omantel has indicated that customer demographics have shifted to favor the MVNOs, who target low-income customer groups – such as young people and migrant workers – adding that the recent drop in oil prices is also a contributory factor, reducing the overall spending power of the population.
There is a big demand for mobile data services in Oman, driven by its predominantly young population. Approximately 30% of inhabitants are between the ages of 15 and 24, with this figure expected to reach nearly 40% by 2020.
There is a big demand for mobile data services in Oman, driven by its predominantly young population.
There’s also a high proportion of expatriate and emigrant workers – 1.7 million from a total population of 3.8 million at mid-2016, according to the country’s National Centre for Statistics and Information – and the MVNOs are capitalizing on this by offering cheaper international call rates.
Things could get even worse for the two incumbent network operators, with the government revealing earlier this year that it is considering licensing a third full service telecoms provider, in a bid to further heighten competition.
The government hopes this will, in turn, bring down tariffs and improve service quality for end users.