ZAWYA DOW JONES

DUBAI IN an effort to grow its subscriber base, Omani Qatari Telecommunications Co (Nawras), will expand its fixed broadband network this year to cover around 80 percent of the country’s households, from 50 percent coverage at present, the telco’s chief executive officer said.

“The reason we invested over the last couple of years in mobile and fixed (broadband) is that we can see growth opportunity in these markets, also international carriers using our international facilities (international gateway).

That’s why we invested in all those areas,” Ross Cormack told Zawya Dow Jones in a telephone interview on Wednesday.

“You can expect in the next few years that this will drive revenue,” he added.

According to its website, Nawras spent 50 million Omani rials ($130 million) on its fixed line business in 2010, double the amount deployed in the year before.

A further OMR140 million is tagged for investment in mobile and fixed operations between 2010 and 2011.

“When we launched fixed broadband services last year for residential, we covered 50 percent of residences.

During this year we are going to be covering up to 80 percent for broadband of households across the country,” Cormack said.

Nawras is banking on its heavy capital investment programme to help turnaround the company’s financial performance.

“In April, Nawras posted a 14 percent decline in firstquarter net profit to OMR12.1 million as higher operating expenses eroded earnings.

Nawras, a unit of Qatar Telecom and Omani partners, competes with local incumbent Omantel.

The telco broke Omantel’s mobile monopoly, in March 2005, when it launched its GSM services.

It obtained its fixed license in June 2010 and has said previously it expects significant growth in the Omani broadband market, which at present is severely under penetrated.

Oman, with a population of around 3 million, is less developed than some of its Gulf Arab neighbours including the United Arab Emirates.

Cormack said that recent changes in regulations relating to the termination of inactive pre-paid SIM cards in Oman to 6 months, from 12 months, shouldn’t impact the company’s revenues.

Nawras’ mobile customer numbers fell by 92,000 in the first quarter as the country’s telecoms regulator, in the second half of 2010, introduced the new SIM card rule.

“It doesn’t change anything from a revenue point of view at all.

It only affected the reported number of customers as required to report to our regulator.

It only affected that number,” Cormack said.

Nawras shares last traded Thursday flat at OMR0.742 in a slightly negative overall market.