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SWOT Analysis of Omantel Khalid Ali Shibli

Introduction

The Oman telecommunication company is the most reliable and unique telecom and multimedia service provider in Oman which is also known as Omantel. The world call telecommunication limited is also the Omantel’s company. the company was founded in the year 1996 Omantel has historically been a technology follower. By avoiding significant investment in leading-edge technology, Omantel has been able to carefully extend and improve services with proven technologies. Electronic payment alternatives have proven to be attractive to customers and financially sound telecom investments. The introduction of ePayments for our prepaid mobile customers represents a first, cautious step for Omantel into eCommerce activities. With a large customer base and a dominant position within a rapidly expanding market, the introduction of automatic refills for prepaid mobile services represents a sound opportunity. Financially, the 10% revenue cost currently outsourced for the manufacture and distribution of refill cards represents a huge (6.6 million OR) loss to the company. Recapturing even a small portion of this revenue can make a profound positive impact on corporate cash flow. Omantel has acquired major shares in other overseas telecommunication companies so as to expand its operational efficiency. World Call is one such company which Omantel acquired by buying 65% of its shares and has enabled Omantel achieve major milestones in the telecommunication industry both in Oman and overseas. Since its inception, Omantel has been a pillar of Omani economy and has played a leading role in Oman’s progress and development most notably by pioneering total communication in the Sultanate of Oman.

This poster covers the company's structure, SWOT analysis, product and service offerings and corporate actions, providing a 360˚ view of the company.

SWOT Definition

SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning. It is intended to specify the objectives of the business venture or project and identify the internal and external factors that are favorable and unfavorable to achieving those objectives. The name is an acronym for the four parameters the technique examines:

· Strengths: characteristics of the business or project that give it an advantage over others.

· Weaknesses: characteristics of the business that place the business or project at a disadvantage relative to others.

· Opportunities: elements in the environment that the business or project could exploit to its advantage.

· Threats: elements in the environment that could cause trouble for the business or project.

SWOT analysis

Strengths

Strong Financial Performance: Omantel posted a strong financial performance in FY 15 with a top line growth of 6.9%, which was also the highest revenue in last four years. The company has also decided to impair its investment in Pakistan based World call Telecom (WTL) which has been a consistent underperformer since 2008 and aected Omantel’s overall results and this move will clean its accounts. Omantel is rated at ‘BBB’ and ‘A3’ by S&P and Moody’s respectively 2. Leading Omani Telco: Omantel

Leading Omani Telco: Omantel is the leading telecom player in Oman with an estimated market share of almost 60% in mobile network in both subscribers and revenue. Its share in xed lines is estimated to be 78% with revenues in the segment at 82%. Its network reach is across the Sultanate and is the leading integrated telecom service provider. It is also Oman’s Most Valuable Brand according to a study by Brand Finance.

Government Support: The government of Oman holds 51% stake in the company, thus it enjoys government support and overall stability. With the government of Oman being a major stakeholder they have a lot of resources available to make sure that they get the best and the latest infrastructure at their disposal. Also, as the government is the major shareholder, many investors have a sense of comfort and do not mind investing in the company.

Strategic Investments across the Telecom Sector: Omantel’s holds 60% stake in its subsidiary, Oman Data Park which ores services such as managed hosting, cloud hosting, managed services and security. The investment in Oman Data Park extends its reach across the other areas and enables it to build a platform to oer comprehensive services to its clients. Omantel also holds a 41% stake in Oman Fibre Optic Co SAOG (OFOC) which is a manufacturer of high quality optic bra in Oman.

Omantel Cost Reduction: The growth and customer acceptance of prepaid mobile services is also attractive to Omantel. Prepaid accounts have reduced the costs of service disruptions generated by slow or late subscription payments. Prepaid mobile tariffs are higher than their postpaid cousin. This benefit, however, is somewhat offset by the additional manufacturing and distribution costs for service refill plastic cards (“Hayyak”). Retail commission payments and the overhead required for manufacturing and distribution of Hayyak cards is approximately 10%. Considering the growth and acceptance of Hayyak service, reducing the overall costs for Hayyak service would create significant savings for Omantel.

Weakness

· Financial difficulties may arise because money amounting to $7.87 Billion have been invested on the acquisition

· High dependence on Voice segment

· Weak marketing

· Lacking a proper long-term strategy

· Weak brand positioning

· Less focus on short-term profitability

· Infrastructure varies from location to locations

· ERP implementation taking too long

· Amount spent on the acquisition seems to be expensive

· Morale and commitment of existing employees may reduce due to new employees

Opportunities

· Demand increased for backhaul network

· Cross-sell in major cities

· Increased demand for LDI and Broadband

· Opportunity to build new kind of telephone services over subscribers in UAE

· Opportunity for expanding of Oman telecommunications operations further GCC

· Privatization of government telecom projects

· PTA delayed 3G licenses

Findings

· I came to know the gain understanding of Oman Telecommunications Company SAOG and the factors that influence its strategies.

· Track strategic initiatives of the company and latest corporate news and actions.

· Through SWOT analysis, I came to know how easily I can Assess Oman Telecommunications Company SAOG as a prospective partner, vendor or supplier.

· Support sales activities by understanding their customers' businesses better.

Stay up to date on Oman Telecommunications Company SAOG's business structure, strategy and prospects, by using SWOT strategies. Omantel has the ability to leverage existing networks and their cutting edge facilities in the Sultanate resulting in improved access performance and guaranteed data jurisdiction. This serves as a critical advantage over ICT platforms what are based abroad. There are also imminent threats to Omantel as a government owned Telecom Company such as falling oil prices. The government of Oman main source of revenue lies in the oil industry. When prices fall, the general investment into Omantel as its majority shareholder also drops respectively. Also, liberation of the domestic market poses as a threat to the growth and development of Omantel. This allows stiff competition against Omantel by other communication companies. Omantel continues to deliver the highest levels of customer satisfaction, broadest and more reliable nationwide network while investing for Oman’s future development through bold innovations. The overall strategy for Omantel ICT underlines how the regional economy is undergoing massive changes driven by digital transformation.

Recommendations

Omantel should create new standards of offering product in basic and value added telephony by being easily accessible, more dependable and cost effective.

The company should mainly target to achieve the highest level of customer satisfaction by introducing ways to raise their standards of technical quality and service delivery to the highest level.

To get a more comprehensive view of subscriber acquisition cost (SAC), Omantel can introduce machine learning and artificial intelligence to their telecom analytics

To ensure the most profitable and sustainable patterns of Return on Investment (ROI) for the stakeholders, Omantel should look to be a leader within indigenous operators in terms of market share and gross revenues and maintain their position.

Omantel should keep track of returns for both the customers and the users as it will provide some interesting practicing insights as it greatly affects returns per an individual (ARPU)

Omantel could seize a greater opportunity in partnering with greater promising technology areas.

Key Financials

References

· Omantel Annual Report 2017: https://www.omantel.om/Investors/facts/!ut/p/(Accesd as on 8th Nov 2018)

· Waleed, G and Kaddafi, S (2016) :a case sudy, ERP implementation in Omantel, https://store.marketline.com/report/1693423--oman-telecommunications-company-saog-strategy-swot-and-corporate-finance-report/

· AS Shatat, 2015, Electronic Journal of Information Systems Evaluation:An explanatory study in oman, p 60-78

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