Reuters/Dubai


Cormack: Scenting profit in data service
Omani group Nawras is targeting mobile broadband to drive revenue growth after the telecoms operator reported flat fourth-quarter earnings, its chief executive told Reuters on Monday.
“If you consider the story of the growth of mobile voice, you can imagine we have got a similar growth prospects in mobile broadband ahead of us,” chief executive Ross Cormack said. “Smart phones are taking the market by storm as are tablets so we are seeing data usage go through the roof.”
In 2011, 30% of Nawras mobile revenue came from broadband, while 12% was from text messaging.
Nawras, majority owned by Qatar Telecom, posted a flat fourth-quarter net profit of 11.9mn rials ($31mn).
Full-year net profit fell 5% to 47.5mn rials.
Revenue in the quarter was up 2% to 50.8mn rials.
Mobile and fixed subscribers numbers fell to 1.96mn at the end of 2011, down from 2.03mn in 2010, but a quarter of mobile customers now regularly use broadband and a further 25% use data every month.
Nawras said the fall in subscribers was “due to regulatory rule changes concerning the counting of prepaid mobile customer base as well as the reduction in the permissible number of SIM cards one person may hold.”
Nawras customers can switch between pre-paid and postpaid contracts without changing their SIM card.
“We try to migrate people onto post-paid contracts,” said Cormack. “It does translate into more revenue - that type of customer tends to spend more than the average pre-paid customer.”
Telecoms operators’ text revenue is in decline, with people increasingly using alternative applications such as Facebook Chat, What’s App and BlackBerry Messenger.
“We did lose a portion of SMS revenue, but we combine SMS with bundles of data and voice,” Jorgen Latte, Nawras chief financial officer, told Reuters.
“The cannibalisation of SMS to data will happen, but we sell broadband packages to enable people to use the likes of What’s App, so if they don’t use SMS but buy our data I’m just as happy,” added Cormack.
Mobile penetration in Oman was 166% at the end of 2010, according to the International Telecommunications Union, up from 34% in 2004. As of the end of third-quarter, Nawras had a 41% share of Oman’s mobile subscribers.
Its earnings before interest, taxes, depreciation and amortisation rose 4.3% year-on-year to 26.8mn rials.
Nawras and rival operator Oman Telecommunications Co are in talks with the Gulf Arab state’s regulator to be assigned coveted lower-frequency spectrum to aid surging demand for mobile data.