Omantel boosts stake in Oman Fiber Optic
Muscat, July 5, 2010
Omantel, the largest telecom company in the Sultanate, plans to boost its stake in Oman Fiber Optic Company to 40 per cent, in a move seen by analysts as a shift in strategy towards local investments.
'We would like to inform that the Oman Telecommunications Company has got the approval from the Capital Market Authority to increase its shareholding in the Oman Fiber Optic Company to 40 per cent, by acquiring additional 15 per cent,' an Omantel statement said on Monday.
Omantel in its Q1 report said that its subsidiary Worldcall Limited, made a net loss of RO560,000 ($1.45 million) but did not give comparison over the corresponding period.
According to Omantel's first-quarter results statement, the company had a 25.96 per cent stake in Fiber Optic.
Muscat-based Fiber Optic manufactures fiber products and its other shareholders include Oman & Emirates Investment Holding and Omani bourse shareholders.
Fiber Optic made a net profit of RO534,000 in the first quarter up from RO443,000.
'The stake increase in Fiber Optic is a clear indication that Omantel is concentrating on its local investments since its partnership with the likes of Pakistan's Worldcall is not bearing fruits yet,' Ahmed Sawadi, financial consultant at Capital Investments Company told Reuters.
'With stiff competition from Nawras, Omantel will need to pull its local resources together to stay ahead of the game,' Sawadi said.
Qtel's Nawras, now providing mobile and broadband services, is on the verge of launching a landline telephone services after a recent license award from the government.
'The purchase of Worldcall has proved to be an expensive acquisition that may well be a deterrent to future strategic partners as well as growing competition at home,' Sawadi said.
Omantel bought 488.8 million shares of Worldcall equivalent to 65 percent of the company, in February 2008. The $193 million deal marks its biggest foreign investment so far. Omantel officials were not available to comment.
The finance ministry owns 70 per cent in Omantel and the rest belongs to private shareholders.-Reuters