TELECOM INCUMBENT READIES FOR FIXED-LINE COMPETITOR

UNCLAS MUSCAT 000881 SIPDIS SENSITIVE SIPDIS STATE FOR NEA/ARP, EB/CIP FOR A. GIBBS STATE PASS USTR FOR J.BUNTIN COMMERCE FOR C.OBERG E.O. 12958: N/A TAGS: ECPS ECON EINV MU SUBJECT: TELECOM INCUMBENT READIES FOR FIXED-LINE COMPETITOR REF: MUSCAT 293 This message contains sensitive business information. Please protect accordingly. -------------- Summary -------------- ¶1. (SBU) Omantel is focusing on expanding its fixed-line subscriber base by promoting enhanced services and considering flexible Internet access options. The move is intended to strengthen Omantel's position before competition is introduced in the fixed-line sector. For security-related and economic reasons, however, Voice Over Internet Protocol (VOIP) services remain closed to DSL subscribers. End Summary. -------------- Busy Signal -------------- ¶2. (SBU) On May 30, Econoff discussed Omantel's fixed-line service strategy with Jerry Mobbs, Sales and Marketing Division Chief (protect). Mobbs noted that one of Omantel's primary concerns is strengthening the company's position prior to the issuance of a second fixed-line license. Mobbs does not anticipate the Telecommunications Regulatory Authority hamstringing the eventual second fixed-line operator based on Nawras' experience, where the second mobile license carrier received number portability and nationwide roaming privileges shortly after beginning operations. ¶3. (SBU) Omantel currently provides service to 235,000 fixed line subscribers out of a potential market of 400,000. Mobbs remarked that demand for fixed-line services remains strong, as Omantel has a wait list of approximately 2,500 applicants. He noted that while the company is able to connect more than 2,000 lines per month, the negative perception among the public regarding the availability of fixed-line connections means that true demand is much higher. -------------- More Services, But Not VOIP -------------- ¶4. (SBU) In efforts to raise public awareness of Omantel's fixed-line services, Mobbs noted that his division has played up offerings such as caller ID, call waiting, tripartite conversation, and automatic call transfer. Mobbs explained that since Omantel had previously done a poor job in capitalizing on the investment that the company had made to provide them, his division decided to repackage them as new offerings. ¶5. (SBU) One service that Omantel customers will not enjoy soon is Voice Over Internet Protocol (VOIP). As it has since February 2006, Omantel continues to block the service port that handles VOIP services for both security-related and economic reasons. Mobbs noted that Omantel's Board of Directors is studying the possibility of offering its own VOIP service, but he does not foresee reopening this port to VOIP traffic in the near-term. -------------- A-la-carte Internet -------------- ¶6. (SBU) Mobbs shared plans for Omantel to widen access to Internet services. He noted that Omantel, still the nation's sole Internet service provider, currently has 62,000 Internet subscribers. Of those, 12,000 subscribe to broadband, while 50,000 use dial-up. Since Omantel is at its limit with regard to broadband subscribers, the company is working on a tender to increase supply over a five year period by an additional 100,000 subscribers. To encourage greater Internet usage, Omantel also intends to introduce a tiered pricing scheme for DSL access, in which customers would pay higher tariffs for higher download speeds. GRAPPO