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Big transformation seen in broadband infrastructure

Newly established Oman Broadband Company will help offer affordable and high speed Internet

  Source http://goo.gl/Bfg0LL

MUSCAT -- For the past several years, Oman has been experiencing strong growth of mobile broadband, but has been lagging behind other regional countries in terms of fixed broadband availability. In October 2013, the Council of Ministers announced their decision to establish a new company to provide broadband infrastructure and services to all residents in the Sultanate. This new company, Oman Broadband Company (OBC), started operations in January this year.

Said al Mandhari, CEO, OBC, spoke exclusively to the Observer in detail about the overall contribution of broadband to the national economies, along with the structure and vision of OBC.

A recent study by the World Bank concluded that low-income and middle-income countries experience economic growth in relation to the increase of national broadband penetration.

The study found that the GDP of these countries consistently grew by 1.38 percentage points for each ten per cent increase of national broadband penetration. As these countries deployed high speed broadband communications, their economies reacted positively to the change in the way people communicated and the way that some digital services are delivered.

The Internet has made such a significant global economic and social impact that it led the UN to announce that broadband is a basic human right, alongside food, electricity, clean water and shelter.

Numerous studies have identified the positive economic impact of broadband on job creation. When broadband is deployed, some services are delivered more efficiently that it will change the type of services available, as well as the type of jobs that people do. Digital services based on broadband brings economic change. While traditional jobs might be lost to digital services, a larger number of jobs are created to deliver those digital services. For example; jobs may be lost at the post office as people send more email and fewer letters, but more jobs will be created to enable the email.

One recent study in the US by the research firm McKinsey concluded that broadband creates 2.6 jobs for each job lost. Creating new jobs is one of the ways that broadband contributes to GDP growth.

In this context, OBC was established with a strategy for delivering national broadband infrastructure. The plan includes a series of steps such as taking over the fibre optic cables that have been laid by Haya Water, and which now pass almost 80,000 residences in Muscat.

OBC also plans to allocate funds to provide rural connectivity through satellite and other applicable technologies.

Al Mandhari said that his company will offer affordable broadband infrastructure to enable high speed Internet to all residents and businesses in Oman, and OBC will thereby deliver economic and social benefits in line with the government's vision of building a long-term sustainable economy.

According to Al Mandhari, "The way to ensure a positive economic impact is to have a company such as OBC that is willing to deploy fibre optic cables and satellite connections to reach all residents in Oman. Once we build the new infrastructure we will sell connections to operators such as Omantel and Nawras to deliver high-speed services across Oman. We are currently managing the transfer of fibre optic cables from Haya to OBC and are working on getting these existing fibre optic cables operational as quickly as possible in Muscat. In 2015, we will begin to build infrastructure of our own in areas outside of the capital."

Al Mandhari said while the company's role is mostly limited to deploying and managing physical infrastructure such as fibre optic cables and transmission towers, OBC will be also involved in active infrastructure when it comes to rural areas. "In Muscat Governorate, we will continue to build the fibre optic network started by Haya and we plan to cover around 90 per cent of the Muscat Governorate by 2021. We also plan to work with other utility providers to cut the costs of civil works by sharing trenches, especially with electricity and water projects, which will accelerate our deployment and reduce disruption to traffic and residents."

Al Mandhari said that OBC will provide satellite networks for rural areas with no existing broadband so that Omantel and Nawras can deliver services to rural communities.

Al Mandhari said that OBC is operating under the MOTC until the board of directors is constituted. The funding for OBC is currently provided by the central government but in the future OBC may be open to investment from private investors. He said, "Financial assistance from the government is a paramount necessity for setting up a new infrastructure company of this magnitude because returns from the investment will take long time and private investment will be difficult to obtain."

He said, "We have done an analysis of our forecasted spending requirements and submitted the findings to the government for review. At the moment, we are financed by Ministry of Finance, through MOTC, since the beginning of this year."

About the OBC road map, Al Mandhari said, "By the year-end, we expect to have a clear idea of how much rollout is possible and the degree of support we can give operators like Omantel and Nawras."

In the next five to six years, Al Mandhari predicts a big transformation in Oman's telecom infrastructure, with broadband enabling the delivery of digital government services, including e-Health and e-Education.

At the end of the first year of operation, Al Mandhari said he will be satisfied if the company meets its target of making the existing fibre commercially available to the operators. We will be also focusing on setting up the company, recruiting our staff and finalising our targets this year while our expanded execution work will begin in 2015.

Recently OBC has launched a competition with The Research Council (TRC), and will post topics related to broadband on June 15 for researchers and university students. These topics will be available on the TRC website. Winning entries will have the potential to be funded by TRC for research of a bigger project in the future.

© Oman Daily Observer 2014

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