Oman Halts Bids for A Third Mobile Phone Operator

After taking bids from several possible mobile phone companies since earlier this year, the Sultanate of Oman has decided to instead give administration of Oman’s third mobile phone carrier to a group which its backed by Oman’s wealth funds.

The state-run Oman News Agency reported that the new mobile phone company will be owned by the funds and run together with a “strategic global partner.” The decision was made to strengthen the role of wealth funds in the country and have them contribute more to economic growth.

When bidding for a third company was initiated earlier this year several companies participated, including, Saudi Telecom Co, Emirates Telecommunications Group, Sudatel Telecom Group and Mobile Telecommunications Co. The decision was supposed to have been made by September 4, but it was postponed by a month.
The Sultanate is studying the best ways to improve the way it manages its investments. It is considering a possible merger of its two main sovereign wealth funds during the prolonged downturn of oil prices.

If the State General Reserve Fund merged with the smaller peer Oman Investment Fund, the new fund would be worth about $25 billion in assets.

The two companies that now serve Oman for mobile services are Oman Telecommunications Co. and Ooredoo Oman, a unit of Qatar-based Ooredoo.

Oman Shifts Position on Iran and Terrorism

U.S. Secretary of State John Kerry speaks with King Salman bin Abdulaziz of Saudi Arabia after he deplaned from his Boeing 747 following his arrival at Andrews Air Force Base in Camp Springs, Maryland, on September 3, 2015, to visit President Barack Obama. [State Department photo/ Public Domain]

Contrary to its usual role as conciliator and neutral arbitrator, Oman has indicated its willingness to be a part of 40-country alliance to oppose Iran and its state sponsorship of terrorism. Until now the Sultanate has been concerned that a wider regional confrontation with Iran would lead to internal de-stabilization within its own borders.

“Oman has always in the past taken positions and policies that are contrary to the Gulf positions regarding the region. This now shows the return of Oman to the Gulf consensus against Iran and its political positions,” one source said.

Siding with Saudi Arabia against Iran is a huge shift for Oman since “it is known that Oman has been close to Iran, the traditional enemy of Saudi Arabia and the Gulf countries.”

Saudi Arabian Prince Mohammed will most likely visit Muscat soon to prepare the groundwork for a visit to Oman by King Salman, the source added.

One reason given for the change in policy is that Oman realized that there was a definite “lack of seriousness and of benefits” of cooperation with the Iranians.

The 40-country alliance was announced last December by the Saudis, a move that was met with approval by the United States. Washington has been urging the region to unify in a campaign to fight ISIL militants who have control of land in Iraq and Syria.

ISIL had threatened the monarchies of the Gulf states, promising to overthrow the kingdoms, and has launched several attacks on Shi’ite Muslim mosques and military personnel in Kuwait and Saudi Arabia.

Oman Cuts Health Benefits to Expat Government Employees

Graphic by Addicted04.

Due to a larger than expected budget deficit, the Sultanate of Oman will be cutting its budget by 5 percent, and some of those cuts are coming from some health care benefits it bestows on government employees.

Expats working in the Oman civil service will no longer be able to take advantage of free surgeries for 18 conditions, and free medications for six different illnesses. The new rules went into effect as of December 5th, and include operations for heart ailments and arthritis meds.

The decision includes both those employed full and part-time.

Other budget cuts are also under consideration as the deficit is expected to total OMR 4.4 billion during the first nine months of 2016, and no increase in revenues is expected.
Other cuts have been made in other sectors, such as employees of state organizations have experienced loss in benefits. There is also a plan to privatize several government assets. Work visa fees to Oman for expats also went up in November by 50 percent.

Veolia Wins Contract to Manage Waste in North West Oman

Veolia waste management dump truck.

A leading international leader of resource management, Veolia, has finalized its first contract in Oman along with its partner, locally-based Al Ramooz National.

The Oman Environmental Services Holding Company, known as Be’ah, awarded the contract to Veolia to manage the municipal waste in the governorates of Al Dhahirah and Al Buraimi. Both areas are in the north-west Oman.

The contract outlines Veolia’s responsibilities to collect and transport municipal waste as well as operating two landfills in the North West region. The activities of Veolia will benefit over a quarter of a million residents in the area.

Veolia views this new deal as a major milestone. The French company has been working in Oman for ten years, but it has never before utilized its waste management know-how there before.

On the contract win, Xavier Joseph, the chief executive of Veolia Middle East, said: “Together with Al Ramooz National, we look forward to supporting Oman and its people with the best-in-class expertise in waste management.”

“Our key focus for this contract will be to contribute to the implementation of the best standards for the waste management operations in the sultanate, as well as support the Omani economy through in-country value,” he stated.

Oman Business Leaders Call for Subsidy Phase Out

Khalil bin Abdullah al Khonji, the former head of the Oman Chamber of Commerce and Industry says that the present economic reality demands a reduction and eventual elimination of the regions huge subsidies.

Despite the fact that the public will protest the withdrawal of subsidies, business leaders say “there is no other way out due to the new economic reality.”

Khonji stated that,

“The fall in oil prices is affecting Oman in a big way. All the reports indicate that the prices are unlikely to reach US$70 until 2020.

“I hope my predictions are wrong, but there is a strong indication that the prices might fall further after the crucial Organization of Petroleum Exporting Countries meeting in Vienna on Friday. It might even touch US$30.”

He added that now is the best time to phase out subsidies, especially those on oil.

“We understand from government officials that citizens will not be affected if the subsidy is removed. We have to prevent smuggling of diesel and petrol to other countries.”

Doing Business in Oman is Getting Better

Buildings in Fujairah, Oman. Photo by: Aravind Sivaraj

According to the World Bank’s “Ease of Doing Business” ranking for 2015, Oman made significant strides, rising from 77th place in 2014 to 70th this year.

The ranking takes into account ten different regulatory aspects of business, such as “enforcing contracts,” “paying taxes,” and “getting credit.”

In the GCC region the sultanate was ranked the fourth best place to do business, ranking much higher than the UAE (31), Bahrain (65), and Qatar (68). Kuwait ranked 101st.

Oman’s rise is mostly due to great improvements in two measurements; ‘getting electricity’ and ‘trading across borders.’ Last year the country was ranked 124 in ‘getting electricity,’ and this year shot up more than 60 places to be ranked 60th in this parameter.

The report explained the change in Oman’s ability to deliver reliable power to business customers:

“In January 2015, the utility in Oman began recording the duration and frequency of outages to compute the annual system average interruption duration index and system average interruption frequency index. This enabled the utility to analyze outage date, identify and eliminate inefficiencies and accurately assess the impact of these initiatives on the distribution network.”

The sultanate climbed from 76th place to 69th in ‘trading across borders’ because

“Oman reduced the time for border compliance for both exporting and importing by transferring cargo operations from Port Sultan Qaboos to Sohar Port,” the report said.

Dell Sees Oman as a High Growth Opportunity

Dell Inspiron 15 5000 Series i5547-3750sLV 15-Inch Laptop. Photo courtesy wikipedia.

As Oman continues to diversify its economy, representatives of the computer technology giant Dell expressed their belief that there will be great opportunities for cooperation with the Gulf State country.

Brian Humphries, president of Enterprise Solutions Sales and Strategies at Dell, explained that he sees a fast-paced transition to e-governance in Oman. This transition positions Oman to be able to take advantage of newly emerging opportunities.

Humphries is visiting Oman as part of a multi-country tour of the region. In Oman he met with customers, partners and employees to better understand the ultimate potential of the market.

“It is important to understand where the next generation of growth will come from,” Humphries said, reiterating Dell’s commitment to the region.

Oman’s Insurance Industry Growing Apace

According to the Times of Oman the Capital Market Authority of Oman announced that the country’s insurance industry has posted a year-on-year growth of 8.8 percent for the first 6 months of 2014.

Unaudited figures showed a total volume of insurance premium sales totaling 226.8 million Omani rials ($589.2 million.) After reinsurance the total net earned premiums came to about OMR 122 ($317 million) compared to last year’s total of OMR 106 million ($276 million.)

Airfares to India Dropping After Summer Vacation

Jet Airways lowering fares as summer season subsides

Jet Air has lowered their airfares to the most popular destinations as demand for tickets subsides with the summer. Air India is making their airline more attractive by allowing 40 kg of baggage per person.

“We slashed our fares to different Indian destinations, especially to Mumbai, Trivandrum and Kochi,” said Rias Kutteri, Country Manager of Jet Airways.

High fares have been coming under attack from non-resident Indians who have been forced to spend the money to travel back for summer vacations and Indian festivals. Riyas says airlines flying to India have been under pressure concerning airfares.

“It’s only during festivals and vacations that more people travel. These are the seasons when airlines increase fares to make more revenue. Even though the coming months will witness festival time in India, we are reducing the prices”, he said.

Inflation on the Rise in Oman

Cost of living in Oman on the rise

The Sultanate of Oman reported an increase in their rate of inflation by 1.21 percent through June 2014 as compared with the rate for the same time period in 2013. A decrease in the rate of inflation was seen in June 2014 when compared with the previous month, coming in at 0.07 percent less.

The information was supplied by the National Center for Statistics and Information, reporting on the latest Consumer Price Index.

The price for foods and drinks, which makes up about 24 percent of costs for families and individuals on average, went up by 2.20 percent during the 12-month period ending in June, 2014. Housing, utilities and fuel costs rose by 1.26 percent, while the price for education increased by 6.24 percent.

Health costs rose by 6.01 percent; communication expenses grew by 0.13 percent; home furnishings, household equipment and maintenance climbed by 7.37 percent.
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