Oman telcos in talks to aid demand for mobile data

Oman Telecommunications Co (Omantel) and rival operator Nawras are in talks with the Gulf Arab state's regulator to be assigned coveted lower-frequency spectrum to aid surging demand for mobile data. Lower frequencies, which travel faster, penetrate better and are more cost-effective, are usually held by the military and the government defence establishment. Without new spectrum allocations, Nawras and Omantel, which have seen their mobile data subscriber base nearly double in the year to September, would need to build more towers or raise data tariffs and cut bundle sizes to slow demand. "The lower frequencies are more hardy, they travel further and go inside buildings more easily," Ross Cormack, chief executive of Nawras, a unit of Qatar Telecom (Qtel), told Reuters. "Higher frequencies penetrate buildings much less well. "You don't mind if you're in Hong Kong or a place where you've got a huge number of people in a tiny area because you will have a lot of base stations anyway, but in our country you have a challenge. You have to build more base stations to reach people and to provide in-building coverage." Oman, the second-largest country in the Gulf after Saudi Arabia and slightly bigger than Italy, has one of the lowest population densities globally at about nine people per square kilometre. This compares with 99 for neighbouring UAE and 1,646 for tiny island kingdom Bahrain. "With lower frequencies, you can get to more people with just one base station," said Cormack. "That's even more important in a country where people have built thick-walled properties with small windows to protect from the heat." Omantel, the former national monopoly, said it too was talks with the regulator. Omantel and Nawras currently have 3G frequencies of 2,100 megahertz and above. Oman's Telecommunications Regulatory Authority wants to 'refarm' its 800 megahertz spectrum to the two operators for mobile broadband, it said in an emailed statement. The two operators were able to roll out 3G services on their allotted spectrum, but they face growing capacity constraints, JP Morgan analyst Ranjan Sharma wrote in a research note. "(This is) from a combination of increasing mobile broadband penetration and rising data usage supported by higher access speeds and bigger data bundles," he said, noting broadband penetration rose by 3.3 percentage points in the third quarter to 20.2 percent. Sharma said the underpenetrated broadband segment will be the main driver of revenue growth for Omani telecom firms, and comes as mobile subscriber growth stagnates, with penetration around 170 percent.