Network investment paying off for Omani telco Nawras, says CEO

Omani telecom operator Nawras is poised to reap the rewards of heavy INVESTMENT in its network, its chief executive told Reuters, forecasting that data services will account for more than half its consumer revenue within two years.

Conventional call and text revenues have slumped globally as more users switch to Internet-based calls and instant messaging applications such as Skype and Whatsapp, prompting Nawras to INVEST in improving the speed, capacity and coverage of its fixed and mobile networks to meet higher demand for data.

Nawras is Oman's second-biggest mobile operator by MARKETshare, but it has endured a choppy few years. Annual profit slumped to OR33.1 million ($85.99 million) last year, from a high of OR50 million in 2010, though revenue rose 7 percent over the same period.

Its fortunes have improved this year, posting a 23 percent rise in half-year profit, which CEO Greg Young says is largely attributable to its INVESTMENT programme.



"We took a decision around two years ago to invest heavily in our network," said Young, pointing to the more than 30 percent of revenue the company has since ploughed into its infrastructure.

"We're seeing the results of that INVESTMENT. Our customers are using the network more, we've got more customers and we're able to monetise that."

Nawras, majority owned by Qatar's Ooredoo, competes with former monopoly Omantel plus two virtual operators that Omantel hosts on its network.

Data currently accounts for more than a third of Nawras's consumer division revenue, Young told Reuters on the sidelines of a conference in Dubai.


"We are projecting that inside the next two years it will pass 50 percent," he said. "We're probably 18 months to two years behind the European trend."

Although Nawras does not publish a breakdown of its consumer and business revenue, Young said that the company's enterprise division - which caters for larger businesses - provides a "small but growing" portion of company income.

Nawras has built its own fibre network, which industry experts say is essential to serve enterprise customers that can help to offset the slump in traditional revenue.

"A number of our big INVESTMENTS are coming to conclusion over the next 12 months," said Young. "We now have the assets, services and offerings to meet all business enterprise customers' needs. We're now a credible competitor."

The company's turbulent bottom line has weighed on its SHARE price, which remains 4.3 percent below its 2010 initial public offering despite the stock's 12 percent gain this year.

At the end of March Nawras accounted for 41.3 percent of Oman's mobile subscribers, Omantel 48.2 percent and the virtual operators 10.5 percent combined, according to data from the telecoms regulator.