PRICING STRATEGY HARMS U.S. FIRM IN RADIO TENDER

UNCLAS MUSCAT 000555 SIPDIS SENSITIVE STATE FOR EB/CBA (BBEHRENS, DWINSTEAD),NEA/RA, AND NEA/ARPI USDOC FOR ADVOCACY CTR (CJAMES) AND DEFENSE TRADE ADVOCACY (DNEWSOM) E.O. 12958: N/A TAGS: SUBJECT: PRICING STRATEGY HARMS U.S. FIRM IN RADIO TENDER REF: MUSCAT 384 This message contains sensitive business information. Please protect accordingly. ¶1. (SBU) On April 5, Econoff discussed the upcoming nationwide radio system tender with Brigadier Hajji bin Adam al-Balushi, Director of Communications for the Internal Security Services (ISS). Al-Balushi confirmed that the ISS has invited only Motorola, Thales (France),and Rhode and Schwartz (Germany) to bid on the tender. He noted that the ISS has not yet decided on the initial tender's scope, though he advised that it would most likely cover Muscat to the city of Buraimi (on the UAE border). Al-Balushi did not expect the tender to happen as quickly as reftel report, but rather "sometime this year." He did mention, however, that Motorola has already submitted a proposal to the project consultant. ¶2. (SBU) Al-Balushi was skeptical that Motorola would be price competitive on this tender. He highlighted Motorola's recent failure to win similar tenders in Dubai, Qatar, Kuwait, and Iraq as indicative of the probable outcome in Oman. In light of this track record, al-Balushi suggested that Motorola review its pricing strategy. GRAPPO