Vodafone’s entry into Oman’s competitive telecom market in 2022 has reshaped the landscape long dominated by Omantel and Ooredoo. In just two years, Vodafone managed to capture 10% of the market in terms of subscribers, gaining significant traction through its unique network, service offerings, and marketing strategies.
Key Takeaways:
Vodafone Oman’s focus on offering 5G services and adopting an asset-light business model allowed it to effectively compete with established players. The operator differentiated itself through competitive pricing, flexible tariff plans, and heavy digital engagement, which enabled it to carve out a notable share in the saturated market. In terms of 4G network performance, Vodafone leads with a median download speed of 66.40 Mbps in Q3 2024, outperforming Omantel and Ooredoo. However, in 5G, Vodafone trails with a speed of 111.21 Mbps, behind Omantel’s 231.23 Mbps.
Vodafone has benefited significantly from customer churn, with its 4G and 5G user bases growing by 12.2% and 36.0%, respectively, from September 2022 to June 2024. Most of these new users came from Omantel, signaling Vodafone’s strong appeal to this customer base.
However, churners from Omantel and Ooredoo experienced varied network experiences after switching operators. Omantel customers saw improvements in their average download speeds for both 4G and 5G after switching, while Ooredoo’s 4G users saw a speed increase, but 5G users experienced a decrease in download speeds.
Vodafone’s Asset-Light Model and Pricing Strategy:
In March 2022, a local consortium, Oman Future Telecommunications (OFT), partnered with Vodafone to launch a new operator under a 15-year non-equity agreement. This partnership enabled Vodafone to offer 4G, 5G, and VoLTE services while minimizing capital expenditure through an asset-light approach. Vodafone leased tower capacity from Oman Tower Company (OTC) for its 5G network and used Ooredoo’s network for 4G services. The company also leased fiber lines from Oman Broadband (OB) to connect its sites.
Vodafone’s pricing strategy has been pivotal to its growth. The company introduced highly competitive introductory packages, offering 77GB of data, 777 local voice minutes, and 777 local SMS for RO9 (USD $23.3), valid for over two months. It also launched the ‘Vodafone Red’ tariff plans with lower per-GB rates, bundles of voice minutes, SMS, and data, as well as allowances for social and streaming media services. Additionally, the company leveraged its global network to provide appealing international roaming packages within the Gulf region and across its global footprint.
Digital-First Approach:
Vodafone Oman also made significant strides in customer engagement through digital channels. The company launched the My Vodafone app to streamline the onboarding process, including the use of eSIMs, and to offer service delivery and support. Vodafone also actively engaged with users on social media and partnered with local influencers to boost brand visibility and run exclusive promotions.
Network Expansion and Market Growth:
Vodafone has heavily invested in its network infrastructure. The company doubled the number of its 5G sites from 750 in 2021 to 1,500 in March 2023, increasing coverage by 120% and driving a 175% revenue growth. This expansion enabled Vodafone to capture 10% of the market share within two years, aiming for 30% by 2032. This rapid growth is particularly impressive given Oman’s high mobile penetration (134% of the population as of June 2024) and the presence of other mobile operators.
4G and 5G Network Performance:
Vodafone leads the market in 4G download speeds, achieving 66.40 Mbps in Q3 2024, which is 20% faster than Omantel (52.23 Mbps) and Ooredoo (51.04 Mbps). Vodafone also leads in 4G upload speeds, fluctuating around 15 Mbps, while Omantel and Ooredoo are closer to 11-12 Mbps. However, the picture is more complex for 5G, where Vodafone’s speeds, starting at 160.73 Mbps in Q4 2022, have trended downward to 111.21 Mbps by Q3 2024, behind Omantel (231.23 Mbps) and Ooredoo (138.92 Mbps).
Customer Churn and Acquisition:
Vodafone has been the primary beneficiary of customer churn. From September 2022 to June 2024, Vodafone saw a 36% increase in its 5G customer base, while Omantel and Ooredoo experienced declines. Similarly, Vodafone gained 12.2% in 4G subscribers, primarily from Omantel and Ooredoo.
Churn analysis shows that users who switched from Omantel to Vodafone experienced improvements in their 4G and 5G download speeds. Conversely, churners from Ooredoo saw improvements in 4G speeds but a decrease in 5G speeds, suggesting that factors such as pricing, data allowances, or customer service influenced the churn.
Conclusion:
Vodafone Oman’s rapid rise in the telecom market can be attributed to its competitive pricing, innovative service offerings, and strong digital engagement. By focusing on 5G, adopting an asset-light business model, and expanding its network infrastructure, Vodafone has become a formidable player in Oman’s telecom market. To maintain its growth trajectory, Vodafone will need to continue innovating, enhancing customer service, and strengthening its position in both 4G and 5G markets.
