Eng. Omar bin Hamdan al Islamili, Chairman of the Telecommunications Regulatory Authority (TRA), responded to concerns about declining net profits among telecom companies in Oman, acknowledging that the entry of a third operator might have affected the financial performance of existing providers. However, he stressed that each company’s financial results should be evaluated individually, given that most telecom companies are publicly listed with accessible reports.
“The introduction of the third operator has positively impacted market competition,” said Eng. al Islamili, adding that market sustainability is driven by multiple factors—not just the number of operators. He emphasized the importance of operational efficiency and consumer pricing, particularly in balancing profit margins while ensuring affordability.
On the topic of addressing these concerns, he noted that markets typically self-correct over time, though he acknowledged that some consumers might struggle with the cost of services. He referred to this as the “hammer and anvil” dilemma, where telecoms must find the balance between affordable services and maintaining service quality and continuity.
The TRA, according to Eng. al Islamili, is working closely with regulatory bodies to monitor pricing and ensure tariffs align closely with actual costs, sometimes even reducing them. He further emphasized that telecom companies must contribute to national economic growth, particularly by supporting sectors like tourism, which relies on the availability of robust telecom services.
Eng. al Islamili also urged telecom companies to diversify their revenue streams beyond traditional offerings. He explained that while profit margins may be affected in the short term due to increased competition, these dynamics can ultimately help improve margins over time.
Regarding investment, he reiterated the importance of companies allocating a fixed percentage of their revenue to capital expenditure for infrastructure projects. The TRA regularly reviews financial reports from telecom operators, with healthy reinvestment rates ranging from 15% to 20%. Oman has currently achieved a reinvestment rate of 28%, highlighting the significance of investments in network infrastructure and the country’s commitment to advanced technologies like 5G and broadband.
Cooperation continues between telecom companies, the TRA, and the government. For example, a previous initiative reduced royalty fees on fixed services from 10% to 7%. Despite some missteps in the sector, Eng. al Islamili emphasized that sustainability in the telecom market requires substantial investments in infrastructure, ensuring service quality and long-term continuity.
