Patch Me In

What makes the culture at Omantel unique?

We merged two companies to form Omantel: Oman Mobile and Omantel. Oman Mobile was responsible for running the mobile business and operating the mobile license, while Omantel was the mother company operating fixed lines, international telephony, and ISP services, as well as capacity sales for international and local carriers. The two companies were merged and, over the last four years, we have brought the two cultures together into a whole new model. This new culture is based on an operating model that is customer-centric. In the past, we were more of an operational functional organization, where the division of responsibilities was based on the function. We have now three main units in the company, and these are based around our customers. We have the corporate unit, another consumer unit, and thirdly we have wholesale, serving the carriers. This structure meant that the rest of the company’s culture had to adapt in terms of mindset, not only in terms of organization. The culture has been evolving to be more geared toward customer needs, and now we are focusing on making every aspect of the customer experience excellent. We are spreading this culture of an improved customer experience.

What do you do to promote an enhanced customer experience?

We do it through staff training. We have campaigns based around the kind of internal mindset-shifts that we desire. The organizational culture is one of the full delegation of responsibility. Key performance indicators (KPIs) are measured on a quarterly basis for some, but for salespeople or technical positions, they have weekly, monthly, and quarterly KPI checks. We believe this has made the company more efficient and has also increased investor confidence. Our shares have improved as a direct result of empowering people in this way.

How important is your corporate services division to your future growth strategy?

The country is undergoing a number of infrastructure mega-projects at the moment attracting multinational corporations, and I think there is a lot of potential there—not only in the connectivity arena, but also in the service arena. Instead of just providing connectivity, we are rendering services that are above and beyond that. We are trying to go higher up the value chain. We have set up a whole new company called Oman Data Park in order to complement the services that we are already providing to our corporate clients. This will be a fascinating growth area.

How does Omantel respond to the high levels of competition in the market?

Each segment has different key elements that need to be focused on. The consumer segment is extremely price-sensitive, in addition to quality and coverage considerations. For this, we continuously review our products and services. We try to improve coverage, though we already have by far the widest available. In terms of quality, we have our fixed network that connects everything, and we have loops around the country that protect the customers from any cuts in the network. With the corporate sector, it considers quality and resilience before price. For the consumer, we are continuously revamping our offers, and for the last four years we have been the fastest-growing mobile network. Along with our partners, FRiENDi and Renna, we have been regaining market share from the competition, which is something that is not common in the region; the newcomers usually take from the incumbent.

What do you make of the level of foreign investment in Oman’s telecommunications sector?

It is a welcome addition to the economy. However, we believe that the country still needs new infrastructure and that foreign investment must be geared toward a licensing scheme that is conducive to deploying infrastructure. In Oman, with many areas not covered for different services, you need to have policies and regulations that are conducive to infrastructure building. We have over 97% coverage of populated areas.

Do you expect internet penetration to continue rising as rapidly as it has been in recent years with more smartphones coming out?

The thing about smartphones is that once they come into the market they tend to stay—a bit like used cars. When you bring in a faster network like 4G, people who can afford it will buy the new devices. The old devices then get sold on or passed on, and the technology trickles down, leading to a mix in your customer base. You cannot suddenly start reusing the 2G frequency for 3G, because some people will still need a level of service. What you can do is optimize the use of the three networks so that you push more voice traffic to 2G because that is what it is good for, and then push the data usage to 3G and 4G. When these 4G devices come they help us to offload congestion from 3G to 4G, but this goes slowly because only a certain amount of people can afford the new technology.

What is the significance of the new submarine cables that have been coming to Oman in recent years?

We look at Oman’s sustainable competitive advantages in the region in terms of its geopolitical position and consider how we can use this to benefit the sustainability of Omantel. This is where the policy of increasing the number of submarine cables to the country came from, because we know that we are outside of the congested Gulf, in open waters with a unique opportunity. Geopolitically, Oman is a friend of all and an enemy of none, so this has made our job easier. We have selectively acquired cables that have a competitive advantage over existing cables. One of these is a cable that runs through Iran, Russia, and Eastern Europe to Frankfurt. This one is largely on land, and this means that it is faster to fix as it takes four hours to retrieve a cable on land and an average of 21 days at sea. Another advantage is its latency. There is also a new cable with another competitive advantage. Most internet traffic goes westward, but we are now working on one called the Bay of Bengal. It goes through India, Sri Lanka, Malaysia, and then Singapore and connects to the internet in the East. This gives us options when there are problems with the internet coming from the West. There was a cut in May 2013, and we were the only company that was able to continue, and in fact we sold excess capacity to other providers.

What is your outlook for the telecommunications sector in Oman?

I think Oman has achieved remarkable penetration numbers since market liberalization. There is room for growth in terms of going higher up the value chain of new services. This comes with people moving from traditional mobiles to smartphones or from people who already have smartphones buying iPads or other technologies. The other element is that we are moving more toward machine-to-machine communications. There are more and more companies that are connecting their fleet management systems, for example oil or logistics companies; there is lots of potential in this area. The socioeconomic and climactic conditions of the region tend to encourage people to stay at home and therefore use broadband more than in other areas of the world. One is that the government is already quite advanced in placing fiber-optic cables in Muscat. The other driver is an external one, which is that people are purchasing more and more Wi-Fi-based devices from TVs to phones to other technology. We are seeing growth in this phenomenon.

What is your vision for Omantel going forward?

What you need to look for in a company is a sustainable competitive advantage. We are identifying our sustainable competitive advantages and reinforcing them. One of these is our backbone and recovery loops that allow us to give close to 100% availability at a fixed network level. We have set up a strategic investment policy that encourages brownfield investment, but we remain open to any opportunities that come our way. Thus far, we do not have any that we are looking for, and we are not aggressively following greenfield opportunities. We are trying to make the company’s income streams sustainable by improving international connectivity through submarine cables. Over the last four years, we have moved from three cables to nine. According to Arab Advisors, a telecom industry research institution, we have become number three in the region and we are growing. In the future there will be less tolerance of service failures as companies cannot go without the internet for long. This is an area that makes our competitive advantage as a carrier more sustainable, and I believe investors see this.

© The Business Year – January 2014