Broad Strategy

Why did the Council of Ministers establish the Oman Broadband Company?

Oman is facing many challenges when it comes to geography and population distribution. Oman has a population of 10 people per square kilometer, which is very low compared to other regional countries. That means that any infrastructure projects that you carry out will only serve a few people at a high infrastructure cost against a low return on investment. That makes it difficult for the telecommunications operators or for the private sector to invest as the commercial justification is simply not there. As a consequence, Oman has been experiencing significant growth when it comes to mobile broadband; however, we are lagging behind when it comes to fixed broadband penetration. We are the second country in the Gulf in terms of mobile penetration, while we are the last when it comes to fixed broadband. Mobile broadband cannot take us further, because it does not have enough capacity to accommodate the growth in bandwidth demand; consequently, the focus on fixed infrastructure is a must. Somebody has to take care of it. Of course, it won’t be the service providers, because it does not reflect a good commercial investment for them, so the only other viable option is for the government to support the investment in order to enable this much needed connectivity for the benefit of everybody in Oman. The government would like to achieve open access to telecommunications infrastructure for both current and future operators, with equivalence in access and transparent pricing. Having this infrastructure funded and owned by the government makes it easier for the operators to focus on competing and investing in high-quality internet and other services. These reasons encouraged the Council of Ministers to approve the national broadband strategy, which entailed establishing a national broadband company. The national broadband strategy has three pillars. The first pillar is related to the changes needed in the regulatory framework to enable and stimulate the investment in broadband-related infrastructure and services. This is related more to the Ministry of Transport and Communications and the Telecommunications Regulatory Authority. The second pillar is stimulating the demand for broadband, and this is mainly related to stimulating demand and encouraging e-services. The third pillar is to enhance the broadband infrastructure and make it more affordable, and this represents the main goal and focus of the Oman Broadband Company.

What will be the impact of consolidated broadband infrastructure on Oman’s economy?

It has been proven worldwide that any growth in fixed broadband reflects a direct impact on GDP. Statistics say that the GDP of developing countries grew by 1.38 percentage points for each 10% increase in national broadband penetration. This is the direct impact on the economy, but there are other benefits of having more widespread broadband, one of them being the creation of a knowledge-based economy. We want to create job opportunities in the technology and ICT sectors, and employ graduates. We will also assist in the creation of a platform for electronic services and the development of the content- and cloud-based service sectors. The new broadband infrastructure linked with Oman’s strategic geographical position and the favorable access to international internet gateways creates opportunity for elevating Oman to become a key internet and hosting hub in the region. This in itself has fundamental implications for Oman’s economy and international recognition.

Health and education are pivotal focuses of the government. How will the enhanced broadband network enhance these two important sectors?

Education and health are the most important clients when it comes to electronic services. The Ministry of Education runs an e-education portal, although it has been suffering from low bandwidth. The plan is to focus on schools, especially in rural areas, and on hospitals and medical facilities that are scattered all over the country. At the same, time high-speed connectivity to Omani households will unlock the possibilities of some health services, such as remote patient monitoring. The same applies for remote learning and access to global scientific content in the education sector.

What kind of technology will be applied to the development of broadband in the Sultanate?

We are trying to implement the latest technologies when it comes to fiber optics. The two current operators have solid infrastructure when it comes to fixed broadband; however, it is dependent mostly on copper or fixed wireless technology. Therefore, the deployed technology has limitations in terms of coverage and speed upgrades. A few years back, the government used the opportunity and decided to lay fiber alongside wastewater network projects in Muscat. This strategic decision means that we are not starting from ground zero; we are starting with around 20% coverage of fiber optics in Muscat. Therefore, the immediate task and opportunity is to enable the operators to use the existing fiber optics. It will be operational from 2015, and will be offered as a wholesale service for all licensed operators to be able to offer fiber broadband services to their customer base in Muscat. In general, the Oman Broadband Company has three main plans when it comes to the implementation of broadband. These plans will run in parallel to expand the reachability and accelerate the rollout of broadband across the Sultanate. The first one is for the Muscat region, where as mentioned we will be commercializing the existent fiber of Haya Water after transferring it to Oman Broadband Company and then expanding the rollout to cover about 90% of Muscat by 2021. The second plan focuses on the urban regions lying outside Muscat where, due to the lower demand and the geographical spread, we are to steadily deploy fiber until 2030. Again, in order to do this we are to align with other utility projects across the country, therefore lowering the civil works cost of the fiber deployment program. In the interim period until the fiber reaches these areas, we are to support the operators in delivering mobile broadband by providing backhaul connectivity to their sites and supporting the deployment of new telecoms towers. The third plan is for the rural areas that are currently not covered. We are working with the operators to reach all areas by satellite or wireless, and to provide basic broadband services. We build the backbone infrastructure, and the operators come in and offer their services.

A skilled workforce will be required to build such important infrastructure. What will be the Omanization level of the company?

When it comes to human resources in Oman, especially in ICT, we have many universities providing good quality graduates in this sector. I don’t think we will be facing a problem in having skilled people in managing and operating this new infrastructure. I think we will be facing another problem, which is finding enough skilled subcontractors to work on our projects when it comes to the initial roll out of fiber optics all over Oman. Most of the big companies are focusing on Muscat, but we need to support implementation and maintenance in other places, which can only be served by local people. Having recognized this issue from the very beginning, the Oman Broadband Company will be supporting the training plans of skilled technical resources and SMEs in Oman that could effectively deploy the network in different regions.

© The Business Year – July 2014