The rollout of training and new infrastructure to see increased IT uptake

A key part of the strategy outlined in Vision 2020, the sultanate’s long-term development programme, is the widening and deepening of the country’s IT sector. This is seen by the government as very much part of the effort to diversify the economy away from oil and gas dependency, offering future generations of Omanis the chance to participate in a high value-added, creative and innovative global industry. Indeed, the Vision explicitly states that its development strategy is to be based in part on advanced technology, with the human resources to match global technological changes. At the same time, the vision emphasises the social development of Oman, with the achievement of greater equity in IT access across the country an important part of this. As a result, Oman has been pursuing major initiatives in ensuring its IT infrastructure reaches across this geographically diverse and demographically dispersed nation, while also encouraging IT investments and start ups to drive future sector growth.

Numbers & Policies 

The key programme for IT is the Digital Oman Strategy, endorsed in 2003. This sees the government as a major cog in pushing forward IT uptake across the country. According to the World Economic Forum’s “Global IT Readiness Report 2014” (WEF GITR), about 62.7% of households in the sultanate have access to a personal computer, with 60% using the internet. This suggests that there is still a large market for computers and associated technology, as well as for internet subscriptions, and that the groundwork for IT uptake by Omanis is pairing well with the rollout of infrastructure.

Through the implementation of e-government services, citizens and private sector businesses will be encouraged to adopt higher level IT services themselves. This in turn will increase the overall level of IT literacy and competency in society, thus enabling the growth of the indigenous IT industry. Coordinating many recent developments has been the 2006 Information Technology Authority (ITA).

The strategy outlines six pillars, each with its own package of corresponding initiatives. The first of these is society and human capital development, under which emphasis is given to programmes teaching and training government and non-government citizens in the use of IT systems. This integrates with education programmes aimed at ensuring all school and college students leave with sufficient IT expertise to participate properly in the future knowledge economy. The e-government and e-services pillar follows. The ITA has been pushing its e-Transformation Plan, which sets key performance indicators and target deadlines for transferring their services of each government department online.

E-Governance

The effort to provide e-service has involved measures to change attitudes in government departments to enable a more successful transition by training and re-training many public employees. As of September 2014, the ITA had reached its own target on this effort, training its 90,000th government employee in IT skills and awareness. The Transformation Plan also requires a change in attitudes to governance in general, a side effect of IT that is also increasing transparency in procedures, as well as efficiency. The development of e-government was also given a boost in late 2013 with the signing of an agreement between the Ministry of Commerce and Industry (MoCI) and the Estonian company, Nortal Gulf, to set up a one-stop shop (OSS) Business and Technology Transformation Project. This will make some 66 different e-services available to small and medium-sized enterprises (SMEs) online, including everything from registering a company name to paying fees. Four Omani SMEs have also been given work with Nortal in the OSS development, which also links SMEs straight to the Royal Omani Police, the Ministry of Manpower, the Oman Chamber of Commerce and the Secretariat of Taxation, among others, further enhancing e-government in these institutions. The OSS project is being rolled out over two years, with six “key milestones” set up to ensure performance targets are met.

Partnering Up

The third pillar is the enabling of further ICT sector development. Under this are a range of initiatives, many aimed at attracting multinational and foreign IT outfits to come to Oman, either in partnerships or joint ventures with locals, or by setting up their own branches in the sultanate. This, the strategy hopes, will enhance knowledge transfer to Omanis, building the bedrock for a wider and deeper local human resources pool.

Incubation packages are also included, with efforts to encourage funding of IT start-ups from banks, venture capital funds and others. In developing this part of the sector, the ITA can draw on the experience of Knowledge Oasis Muscat (KOM), the sultanate’s first dedicated technology park and the ITA’s HQ. This campus-style facility has brought together colleges specialising in the sector with major international IT corporates, such as Microsoft, and a range of smaller local and regional IT and telecoms outfits, as well as those engaged in other forms of scientific study and commercialisation. This incubation approach, encouraging smaller firms to rub shoulders with government agencies, educational institutes and larger success stories, can create the kind of synergies necessary for IT start-up creation.

KOM is about to begin a major expansion, with the creation of Technopolis, a 1m-sq-metre, four-package development. This will see the addition of residential areas, as well as further space for IT firms and other knowledge economy-based ventures. The first package was set for award by the end of 2014. The ITA has also launched the Sas Centre for IT incubation, with this now added to by Sas VR – an online version – and, due in late 2014, Sas Mobile, targeting start-ups in the mobile technology field.

The Sas initiatives (“ sas” in Arabic is a concept referring to a solid foundation) are all partnerships too, with private sector companies. They also target SMEs, providing training programmes, seminars, and workshops on all aspects of running an IT business. According to the ITA, by the second quarter of 2014, about 13 companies were enrolled in the Sas Centre, with two being given virtual support and the rest in-person assistance. The companies ranged in interests, from design to advertising, and from software to mobile phone apps.

Pillar number four is that of government standards and regulations. This is concerned with ensuring that the sector is regulated according to the best international practices, while also ensuring consistency across jurisdictions. E-laws are a key part of this, in particular in terms of intellectual property (IP) rights. Regarding these, Oman is already a member of the World IP Organisation (WIPO) and has signed the Madrid, Berne and Paris conventions on IP rights and trademarks, with laws concerning the latter also being Trade Related Aspects of IP Rights (TRIPS) compliant. Unlicensed copying is punishable by fines and/or imprisonment. The WEF GITR thus ranked Oman 35th out of 148 countries in terms of the level of development of their ICT laws – ahead of many European countries, such as Spain and the Czech Republic – and 24th in terms of IP protection, with only the UAE ahead in the Gulf region, at 20th.

Oman has demonstrated its willingness to work with multinationals on this. In 2006, for example, the ITA signed an agreement with Microsoft to procure licenses for the use of its products in all government offices. Microsoft, in turn, has assisted the Omani government in re-investing some of its returns from this agreement in training and development programmes for locals in the sultanate. The IP rights of foreign companies are protected, while Omani citizens gain expertise for the knowledge economy.

The fifth pillar of the plan addresses promotion and awareness. This includes annual and semi-annual events to promote the e-transformation programme and e-government services, along with an annual awards ceremony for the industry. Promoting Oman as an IT destination overseas is under this rubric, with the sultanate setting out its stall at many international events.

Rolling Out

Pillar number six is national infrastructure development. Since the Digital Oman Strategy was endorsed, internet penetration in the sultanate has progressed enormously, as has the IT sector overall. Yet more remains to be done, with the government behind projects to boost the hard infrastructure side of IT in the sultanate.

The latest figures from the National Centre for Statistical Information (NCSI) show that Oman had some 2.7m active mobile broadband subscribers in September 2014 – plus around 166,000 fixed broadband accounts. In comparison, the NCSI figures show around 49,000 fixed-line internet subscribers nationwide in 2004, rising to around 80,000 in 2008. The number for 2013 was 159,000 – indicating impressive growth in the first half of 2014, too. Figures for mobile broadband subscriptions before 2011 were not available, but back then, they stood at 1.07m, rising to 2.44m by the end of 2013.

This was out of a total population that stood at some 3.85m at the end of 2013, which, even allowing for further growth in the populace since then, still means around 70% of all those living in Oman today have broadband access of some kind. Indeed, the WEF GITR 2014 report ranked Oman 40th in the world in its networked readiness index, ahead of most of Eastern Europe, though behind the UAE and Saudi Arabia, in terms of regional peers.

Yet much of this access is concentrated in the northern Muscat region, with a smaller hub around Salalah in the south, which is where the majority of the country’s population lives. The NCSI figures, for example, show that some 56.1% of all fixed-lines in the country were in Muscat Governorate at the end of 2013, with 9.5% in neighbouring Al Dakhliyah Governorate – mainly in and around Nizwa – and with 9.2% in Dhofar, where Salalah is located.

High Frequency

The vast majority of the connectivity is also via smart phones, in the past relying on 3G and 3.5G technology, although there has been a successful campaign of 4G long-term evolution (LTE) rollout in recent times. Omantel now offers 4G LTE in all the major conurbations in the north, along with Duqm and Salalah. Omantel began rolling this out in 2012, with a time division LTE system, while the operator’s rival, Nawras, opted for an LTE frequency division duplex (FDD) model on the 1800-MHz spectrum. By September 2014, Nawras was thus able to launch the sultanate’s first 4G LTE home broadband service offerings for both pre- and post-paid customers. However, given that the overall digital policy of the country is aimed at maximising equity in IT, this service has presented the government – and IT providers – with some significant challenges.

Profitability in rolling out fast, fixed and 4G LTE broadband connections to remote areas is often non-existent, with private sector companies thus reluctant to engage. Indeed, population density in Oman is around 13 people per sq km, according to the US Population Reference Bureau’s 2014 report. In the neighbouring UAE, it is 113.

This challenge is thus now being tackled via a number of governmental and regulatory strategies. First, there is the Universal Service Policy (USP) attached to the licensing agreements for IT and telecoms providers. This requires them to roll out services across the country, in a phased way, and thus bring remote communities into the grid.

Second, there is the rollout of a national, fibre-optic broadband service. The Ministry of Transport and Communications is a driving force behind this, taking further an existing scheme which saw fibre-optic cables laid at the same time as new water pipes in the Muscat area, via a collaboration with Haya Water. In April 2014 the national Oman Broadband Company (OBC) was created to run a larger version of this project, with the aim of eventually extending the effort in order to cover the entire sultanate.

The OBC told local press in June 2014 that it had already laid fibre-optic cable for about 25% of Muscat and aimed to cover 90% of the Muscat Governorate by 2021, along with 30% of all other urban areas. In the longer term, by 2030, the target is for all urban areas to have around 95% fibre optic broadband connectivity, with 30% of all rural and remote regions also directly connected – although by then, about 95% of these rural areas will have some fast broadband connection, via satellite and/or mobile broadband coverage if not by fibre optic.

The OBC is also getting international branding, thanks to a tendering contract for this issued in late 2014, when it was also in negotiations with Omantel and Nawras over providing fibre-optic cable on a lease basis. At the time of writing, the details of what business model the OBC would eventually adopt were still being clarified, however. Whatever form it takes though, the OBC faces challenges – and provides a major opportunity for a variety of local and international companies specialising in the field.

The size of the country, its topography and the dispersed nature of the population will mean that major construction work will be required to reach more remote communities. At the same time, the success of the rollout in Muscat so far has been thanks in part to the positive synergy between Haya Water’s pipe laying to new properties and fibre-optic cable laying. This keeps costs low, as connecting trenches do not have to be dug twice. Finding this kind of synergy elsewhere may, however, not be as straightforward, and wireless systems may well prove more cost-effective in more dispersed areas. Nonetheless, the OBC and the government are committed to the project, with huge potential for the sector – as well as for the economy overall. On the latter point, the Oman Fibre Optic Company (OFO) will likely be a main beneficiary, with this local cable manufacturer expecting new orders at its plant in the Rusayl Industrial Estate as the broadband project rolls out.

In The Clouds

Another important part of the country’s IT infrastructure is now being provided by the Oman Data Park (ODP). Omantel holds a 60% stake in the ODP and, on launch in 2012, it became the first cloud and data service in the sultanate, and the first cloud online in the Middle East. The ODP hopes to gain a share of the $142bn global cloud industry, a field which has grown exponentially in the Middle East in recent years. Indeed, global trends of late have also been for companies to look for more local termination and storage of data, a factor upon which the ODP is also well placed to capitalise.

While the ODP currently conducts most of its business with local or locally based companies, the longer-term strategy for the centre is also to capture more of the global market. In this, it should find assistance in Oman’s geostrategic location. Going back to the 19th century, the sultanate has been a key link for global cable systems, with this still the case today. A look at the submarine cable map shows that six key international cables, linking Asia with Europe and the Middle East, Africa and the Gulf, all connect through Oman. These include the Fibre Optic Link Around the Globe (FLAG) and the SEA-ME-WE-3 cables, among others. Additionally, the sultanate is pursuing a strategy of trying to establish itself as a colocation site for the Gulf-EU-US. This has had some success too: in 2011 Tata Communications, the Indian-headquartered company that owns the world’s largest subsea cable network, launched its Oman-India TGN-Gulf cable, along with Nawras. As a sign of Oman’s strength in the undersea cable sector, too, in August 2014, Omantel was able to announce it was investing $31m in a landing station for the Asia-Africa-Europe submarine cable in Marseilles, France – the first station outside the sultanate that Omantel will operate. Omantel is now part of nine transnational submarine cable networks – up from just three in 2009 – with a plan to add four more to this total by 2015. This is part of strategy to boost wholesale business, as well as available bandwidth. ODP officials speaking to OBG in September 2014 suggested their centre was already at around 60% capacity, with plans in the pipeline for the construction of a second data park.

Building The Sector

“Broadband will continue to be a driver of ICT in Oman,” Salim Al Ruzaiqi, CEO of the ITA, told OBG. “Retail and corporate customers will require more bandwidth to fully realise the benefit of technology.” Indeed, a pre-requisite of a successful IT sector is a top of the range network, with fibre optic supplying the fastest connections. Facilitating private sector take up and development of this facility into commercially viable ideas is another key part of the digital puzzle, though, with the ITA in particular now concentrating on this.

More involvement with foreign firms should have knock-on effects on the local industry, specifically by introducing niche markets. “Increased exposure to global providers, coupled with the huge appetite from the younger generation to connect via new social platforms and streaming media services is driving significant growth in non-traditional markets such as media communications,” Mohammad Al Farei, managing director of Zeenah Group, told OBG.

Outlook

Behind the Sas programmes and much of the ITA’s other efforts is the perceived need to kick start an entrepreneurial culture among Omanis with an interest in IT. This is no straightforward matter – innovation and creativity cannot be legislated, after all – but an environment conducive to such a culture can be enabled. This may require more liberalisation of the sector – an element that the government is committed to, boosting competition and allowing easier access and departure from the market. It also may require a further culling of existing blocks and restrictions on content, as well as greater diversification in offerings from the main telecoms firms – Omantel and Nawras. This would likely include more cloud based management services, point-to-point connectivity and infrastructure-as-a-service (IAAS) for businesses in particular. Creation of content in Arabic for an Omani audience is generally less common in the sultanate than in regional rivals, such as Dubai and Jordan, although, as Sas shows, there are some hopeful signs. With a relatively small proportion of Arabic literature digitised, this is a major potential market for online development. The year 2015 sees the end of the current five-year plan, while Vision 2040 is currently being put together. These new policies may see a revised approach, with the IT sector given more emphasis in the future.