OMANTEL PRESIDENT TALKS BUSINESS, BOYCOTT

UNCLAS SECTION 01 OF 02 MUSCAT 001500

SIPDIS

SENSITIVE

STATE FOR NEA/ARPI, NEA/PI, EB/CIP/BA, EB/CBA
USDOC FOR BIS - DMCCORMICK, DJACKSON, WWYSONG
USDOC FOR ITA - PLICTENBAUM
STATE PASS USTR FOR JBUNTIN

E.O. 12958: N/A
TAGS: BEXP ECON ECPS KBCT MU
SUBJECT: OMANTEL PRESIDENT TALKS BUSINESS, BOYCOTT


1. (U) Summary: A meeting between Omantel's Executive
President, Embassy and U.S. Department of Commerce officials
produced positive results in removing boycott language from
company documents. The company's president also stressed the
importance of streamlining procurement decisions to Omantel's
future. He lamented what he sees as the inability of U.S.
executives to build complete relationships with Omani
counterparts as a key impediment to doing business in Oman.
End Summary.

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BOYCOTT LANGUAGE: STRIKE IT OUT
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2. (U) On October 1, Econoff, accompanied by the U.S.
Department of Commerce's Office of Antiboycott Compliance
Director Edward Weant and Attorney Frederick Davidson, met
with Omantel acting Executive President Tariq Ali al-Amri to
discuss Omantel's use of Israeli boycott language in its
commercial documents. From a commercial point of view,
al-Amri agreed that the boycott language should be
eliminated, as his main objective was getting the best deal
for his shareholders. However, al-Amri noted that Omantel
was simply following government directives on this issue, and
thus referred us to the source of the language. (Note:
Econoff and DOC raised the issue with the Ministry of
Commerce and Industry earlier that day, during which we
received a written statement from Minister Maqbool bin Ali
Sultan that Oman did not apply any aspect of the boycott or
had any laws to that effect. End note.) Upon reviewing this
issue with his legal office, which informed him that the
government did not require such language, al-Amri assured us
that the boycott language would be eliminated.

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OMANTEL LOOKING FOR FLEXIBILITY
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3. (SBU) Al-Amri then spoke of his dissatisfaction with the
current tender process for Omantel, which he considered to be
sluggish and inefficient. He envisioned Omantel moving away
from the government tender board, which took between 3-6
months to award a contract, toward one run by Omantel, which
would take as little as two days to reach a decision. (Note:
Following a July 2005 IPO involving 30% of company stock,
Omantel is in the process of transforming from a
government-owned entity to a semi-privatized one, which
includes divorcing itself from certain aspects of government
oversight and regulation. End note.) Al-Amri also spoke of
Omantel's improved position in negotiating deals with
vendors. He conveyed his view that vendors previously had
the "upper-hand" in the business relationship, leaving
Omantel stuck with what he considered substandard equipment.

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DISCONNECT WITH AMERICAN BUSINESSES
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4. (U) Al-Amri expressed strong views concerning the conduct
of U.S. business executives in Oman. He prefaced his
comments by noting that U.S. corporations were relatively new
to the Omani market, and therefore unaccustomed to Omani
business practices. He found, however, that his recent
contacts with U.S. executives had not been very encouraging.


5. (U) Al-Amri conveyed his perception that U.S. executives
do not extend to their Omani counterparts the same level of
professionalism that al-Amri had seen them exhibit toward
fellow American counterparts. (Note: Al-Amri earned both his
undergraduate and graduate degrees in the United States, and
commented that his best years were spent there. End note.)
Al-Amri stressed the need for U.S. executives to adopt a
holistic approach toward developing their relationships with
potential Omani clients, rather than focusing exclusively on
their own company's bottom line. Al-Amri referred to the
assistance Siemens provided to Omantel following recent flood
damage to its facilities in Salalah as an example of a
company that understands and values its relationship with
Omantel.


6. (SBU) In commenting on Hewlett-Packard's recent loss on an
Omantel tender contract, al-Amri mused that HP failed to
demonstrate how it could provide value to Omantel. He
cautioned that Omantel would not pay a premium just because
the company is American. He considered the combined factors
of quality, price, service, and partnership as tantamount to
winning bids. On the positive side of the ledger, al-Amri
found that American executives employ a high standard of
business ethics and are well-versed in the products that they
sell, particularly in comparison to Chinese competitors.
BALTIMORE