Oman has embraced modernization and economic progress despite being the oldest independent state in the Arab world. It exhibits long-standing traditions seamlessly integrated with modern-day living, making its transformative economy more proactive and digital than before.
With a population of 4.61 million as of January 2023, Oman is seeking to establish itself as a leading ICT hub in the Middle East region. With a strong digital capability and infrastructure, Oman Vision 2040’s digital transformation is expected to boost the Sultanate’s ICT market to over US$5 billion by 2024.
Muscat, the capital of Oman, was named the Arab digital capital for 2022, highlighting the effectiveness of the country’s digital economy strategy in supporting all key sectors, particularly ICT. The evolving digital journey of Oman is aligned with and a response to the evolving communication needs of its people.
ICT spending in Oman is estimated to grow at a CAGR of 11.3%, driven by e-governance and related framework policies. There is an evident rise in e-commerce and ongoing developments in cloud services and technologies like 5G, AI and cybersecurity, mainly attributed to shifting industry trends to deliver services that are more agile, secure and interconnected.
According to a strategy report on the country’s national strategic framework for the ICT sector, four pillars — digital infrastructure, digital ecosystem, digital capabilities and institutional governance — will help Oman achieve its ICT Vision for economic contribution, societal empowerment and sectoral enablement.
The long-term goal is to shift from “consuming” to “producing” ICT services and goods, making ICT a vital instrument to improve the quality of life of Oman’s residents and acting as a prerequisite for innovation and competitiveness in key economic sectors.
Digital Infrastructure
Oman has come a long way in its telecommunication journey since 2003, when the government issued its first Telecom Liberalization Policy, until its 5G Roadmap announcement was made in 2019. That same year, it awarded the Spectrum Rights for 5G in the frequency band 3.5 GHz to licensed mobile operators.
As part of the increasingly globalized digital economies, the need for universal connectivity has become quintessential for every country’s developmental agenda. Oman is no exception.
Oman has recognized the ICT sector as a catalyst for innovation and competitiveness in key economic sectors. As such, establishing a high-performing, future-ready and affordable ICT infrastructure to provide access to all residents and businesses is gaining momentum in the Sultanate. As per the EasyPark 2018 Smart City Index, one Omani city is expected to figure in the top 50 smart cities, and at least two Omani cities are anticipated to figure in the top 100.
To maintain a well-functioning ICT infrastructure, Oman strives to follow a liberalized and agile regulatory and legislative framework that incorporates global best practices to guarantee a level playing field for existing players and new entrants.
• Internet Connectivity
Latest data shows that there were 4.44 million internet users in Oman at the start of 2023, when internet penetration stood at 96.4%. At the start of 2023, 87.9% of Oman’s population lived in urban areas while 12.1% lived in rural parts.
Ookla indicates that internet users in Oman could have expected median mobile internet connection speed via cellular networks at 52.35 Mbps and median fixed internet connection speed at 59.74 Mbps. The TRA is currently working to raise the efficiency of networks and improve fixed and mobile broadband speeds. The authority aims to upgrade the home internet range of networks that operate via copper cables to the fifth-generation networks as well as fiber-optic networks. The TRA, in partnership with the Ministry of Transport, Communications and Information Technology (MTCIT), has developed a clear and deliberate plan for a smooth transition to the IPv6 for the continued growth and stability of the Internet, as technologies such as the smart cities and the Internet of things (IoT) require the allocation of Internet addresses at an increasing rate more than ever.
• Data Centers and Networks
In a digital economy, data computing and data storage are of utmost importance since the amount of data produced by the world every year is predicted to enter the yottabyte era in no time. A digital infrastructure must meet its core needs of communication exchange and handle diverse workloads through information technology (IT), operation technology (OT) and communication technology (CT). Moreover, 5G deployment in the country is driving data center edge market development with Ericsson securing 5G framework agreement with Ooredoo Oman and Omantel launching commercial 5G services.
As such, in line with Oman’s 2040 Vision, the government has taken significant steps to bolster the data center market with many initiatives, including the reduction of the land cost to facilitate the investment of data centers in the country. A good data center infrastructure can provide world-class colocation services to leading international telecom companies. Oman's data center market size was previously valued at $286 million and is expected to reach $470.8 million by 2027, growing at a CAGR of 11.42% during 2021–2027.
As a prime example, as part of its wholesale vision, “From Oman to the World,” Omantel recently partnered with Wingu Group’s Djibouti Data Center to expand into the African market and further boost its standing as a leading regional wholesale hub. Wingu Group’s Djibouti Data Center was the first and only carrier-neutral data center facility in East Africa with access to all major international fiber optic systems connecting Europe, the Middle East and Asia Pacific regions with Africa. In 2019, Oman launched the ENTRADA System, an experimental Big Data platform specifically developed for DNS Traffic Analytics for Trends and Threat Intelligence, in cooperation with Sultan Qaboos University (SQU). Furthermore, the increasing cloud adoption in the region is accelerating the need to develop secure and reliable cloud services and technologies for businesses in Oman.
• Fixed Broadband
As per TRA, Oman’s fixed broadband penetration stands at 74.39%. Oman boasts a full fiber-optic access network to deliver FTTH services. A national core backbone network developed by Oman Broadband Company as part of the National Broadband Strategy provides connectivity between metropolitan locations and across the nation. The network, primarily based on passive infrastructure, combines fiber owned by Oman Broadband with fiber owned by other utility vendors, with network coverage expected to reach 95% by 2030.
• Spectrum Allocation
Oman’s spectrum management follows the legislative mandate from the Telecom Act of 2002 for establishing the policy and regulatory framework for telecommunication services.
The National Spectrum Allocations Plan is the specific document for regulation of frequency allocation and utilization in Oman to ensure effective use of the spectrum and the prevention of radio frequency interference between services. However, TRA dictates the right to use the frequency band (or a specific frequency) to develop, produce, import and operate radio equipment in compliance with the national Telecommunication Act, international trends and existing applications.
• Mobile Telecom
As per TRA, Oman’s mobile broadband penetration stands at 104.42%. The number of mobile phone subscribers in Oman increased by 11% to 6.8 million at the end of January 2023, according to the National Centre for Statistics and Information (NCSI). TRA in cooperation with relevant companies was able to upgrade more than 80,000 subscribers to 5G network by the end of 2022.
Oman’s Telecom Regulatory Authority regularly conducts field surveys to identify villages and areas that have few or no telecommunication services and provides coverage for them through various projects and initiatives. The authority has coordinated with telecom companies to build and strengthen 252 stations as part of the telecom companies’ license renewal obligations.
To deliver home internet services to rural villages and thus better reduce the digital divide between urban and rural areas, TRA has coordinated with the Oman Broadband Company to identify approximately 600 villages to be covered by satellite links.
Digital Ecosystem
Oman fosters a competitive landscape with multiple stakeholders in the telecom services market as well as subscription market shares across segments. Oman’s telecom ecosystem caters to various sectors, including enterprise, security and surveillance, government, data centers, service providers, industrial and so on.
The competition among key telecom players — Omantel, Ooredoo Oman, FRiENDi Mobile, Renna Mobile, Vodafone Oman and Awasr — has helped in the creation of new jobs, fueling economic growth and improving quality of life, health and education for the citizens and residents of Oman.
Omantel led the mobile market in 2021, driven by its strong focus on 5G services and data-centric plans with value-added services as customers’ demand for data and OTT services increases. Omantel also led the fixed voice segment in 2021, supported by its strong foothold in both the circuit-switched and VoIP segments.
Through its digital ecosystem, Oman seeks to increase the contribution of IT to the Omani economy as well as nurture a thriving IT industry with private Omani companies and locally operating MNCs to provide holistic digital government services, including open data.
The latest market research findings show that the overall telecom service revenue in Oman will grow at a CAGR of 3.8% during 2022–2027.
To broaden its reach to enterprise and wholesale customers, Omantel has collaborated with UAE’s du to connect Oman and the UAE with a new 275 km international fiber optic submarine cable named the Oman Emirates Gateway (OEG) that will meet the evolving market demands, scale up speed, expand connectivity, deliver enhanced customer experience and provide wider commercial offerings.
The OEG is the first of its kind regional fiber-optic submarine cable, which connects two international data centers — Equinix MC1 in Barka, Oman and DX1 in Dubai, UAE. This link will act as a major facilitator for hyperscalers, content providers and international carriers that are currently hosted in these data centers to avail improved connectivity services and higher capacities and will be able to directly link their Points of Presence (POPs) in the region.
Similarly, Vodafone Oman, after entering the market in 2021 as the third operator, has been actively collaborating with global technology company Netcracker to support the launch of mobile business and leveraging critical data to bring in DevOps and managed services processes to their business and operations.
Meanwhile, Ooredoo Oman has been focused on providing a suite of services, including capacity, infrastructure, co-location, managed services, telepresence, content provision and content delivery networks (CDNs), investment in data centers and subsea systems, and so on. Ooredoo has recently won a tender to provide cable landing facilities to “2Africa” (2AF) at Salalah and Barka, joining a global consortium of communications operators. The 2Africa cable system is one of the largest subsea projects in the world, connecting 46 cable landing stations in 33 countries in Africa, Asia and Europe with a cable length of 45,000km, making it the longest subsea cable system ever deployed.
According to GlobalData’s findings, mobile data will remain the largest contributor to the total telecom service revenue over the period 2022–2027. Mobile data services revenue will increase at a CAGR of 8.7%, driven by increasing smartphone subscriptions, growing data consumption and the growth of 5G subscriptions that will yield higher data ARPUs over the forecast period.
Digital Capabilities
Digital capabilities aim at improving the competencies of Omanis in the local labor market, equipping them with the “skills of the future,” which are mostly related to technology, and boosting scientific research related to ICT that covers “technology innovation.”
To thrive in the ICT environment, Oman’s ambitions regarding its digital capabilities include digital inclusion and participation of both residents and businesses; digital safety; and enhanced human capital through ICT awareness and adoption in the education system and local workforce.
Businesses in Oman are envisioned to adopt cloud solutions further into their operations and increase their online presence. A market research report says that with investments in public, private and hybrid cloud solutions, the Omani economy will enable businesses to generate nearly US$1 billion in net new revenues by 2025.
Omantel and Huawei joined hands in November 2022 to identify cutting-edge services that can boost the adoption of cloud technology by organizations and develop the cloud business market in the country. Moreover, Vodafone Oman has been supporting SMEs, building capacities and helping businesses in Oman scale up by leveraging its international expertise, data-driven knowledge and market-leading best practices across operational touchpoints.
Upon signing an MoU with MTCIT, AWS implemented the Middle East’s first AWS Data Center District in Oman to attract foreign technology companies and ensure that companies have access to the latest cloud technologies that enable them to continue innovation and digital transformation across the region.
Additionally, one of the objectives aligned with Oman’s digital capabilities is encouraging the registration of patents. The Ministry of Commerce confirmed in a statement that the government is interested in the field of intellectual property in all its sectors. There has been a significant growth in patent applications from Omanis to protect their inventions, increasing from 13 in 2020 to 108 in 2021.
With the country’s industrial progress, there has been a crucial link between the protection of intellectual property rights and technological and scientific advancements. As a result, there is a great commitment to consolidating the developing economy and building a future where innovation is at the heart of Oman's growth.
According to the ITU, in the cybersecurity field, Oman has been very active and conducts continuous audits and checks. Because of this, it has earned its rank on the Global Cybersecurity Index as third-best in the world among countries that are most prepared for cyberattacks.
In fact, MTCIT recently announced the launch of its cybersecurity industry program, which will create a specialized cybersecurity industry that will strengthen and diversify the local economy. The Oman Data Park (ODP) is the only provider that has a specialized Cyber Security Park, run by highly qualified Omani staff, offering security operations and services around the clock.
The Sultanate has put education and learning as key priorities of Oman Vision 2040, from the primary to university levels. They aim to move Omani universities up the global rankings index and eventually be recognized among the top 20 countries in the Global Talent Competitiveness Index.
In 2020, the Global Innovation Index showed that Oman had the highest share of graduates in the STEM track. Comprising almost 50% of the country's total graduate talent pool, Oman is making itself an ideal location for businesses looking to hire tech talent.
The MTCIT launched the National Digital Competence Initiative (MAKEEN) in September 2022 to empower Omani youth with advanced digital skills that are in demand in the current labor market. By 2025, the initiative aims to train 10,000 Omanis with digital skills and provide income-generating opportunities for Omani youth in the digital sector.
This will also impact the rapidly-innovating business environment in the country and the growing need for technical competencies in the fundamentals of cloud, data and AI, among others. Indeed, one of the executive programs launched as part of Oman’s National Program for the Digital Economy is centered on AI and advanced technologies.
Combining academic qualifications with digital capabilities and professional certifications is imperative for current employees and those aspiring to join the workforce. Numerous graduate programs in Oman provided on-the-job, project-based, online and classroom learning to facilitate digital progress in line with the performance indicators of the Oman 2040 Vision.
Another valuable project is MaharaTec, launched by the Oman Information Technology Society (OITS) in 2021 in collaboration with Microsoft. Spreading the ICT culture in the country generates opportunities for young talent in the country to hone their skills and gain career-building experiences.
A 2023 Oman Skills Survey revealed that “IT and communications” are expected to be the most important industries in Oman across the next decade. Thus, universities offering STEM education should encourage more involvement from industry to support graduates in becoming more industry-ready.
In March 2023, the outstanding work of talented students at Oman’s Center of Excellence (CoE) for Advanced Telecommunications Technology and the Internet of Things (IoT) was recognized by Ericsson and Oman’s Ministry of Finance, as well as the Ministry of Higher Education, Research and Innovation.
Institutional Governance
In 2020, His Majesty Sultan Haitham Bin Tarik approved the Oman Vision 2040, which was put into action as of early January 2021. The government, since then, has prioritized ICT development, with the sector on the path of accelerated growth in the years ahead.
An important pillar of achieving this is having streamlined governance with clear end-to-end responsibilities. This drives the numerous policies and strategies in place for a holistic ICT sector. The MTCIT oversees national IT infrastructure projects and e-government initiatives, while the Telecommunications Regulatory Authority (TRA) provides considerable oversight and policy guidance in telecom services, particularly in the deployment of 5G.
The ICT projects mandated by MTCIT are intended for the national IT infrastructure, IT training, national programs, SAS centers, ICT development, laws and governance, and information security.
Focusing on the development of the national IT infrastructure, the Oman Government Cloud is established, along with the Oman eGovernance Framework, the Oman Government Network, the National Data Center, the National Digital Certification Center and the Integration Platform. Various policies are also implemented targeting the space sector, IT governance, AI intelligence systems, information security management, open government data, ICT service continuity and ICT remote access.
At the core of governance is the National Program for Digital Economy and the Government Digital Transformation Program. Both programs are essential to realizing an economy reflected in the digitization of government services, businesses and society at large.
To increase the trust of citizens and businesses, MTCIT has initiated the formation of e-transaction and cybercrime laws. Furthermore, the compliance department at MTCIT focuses on the assurance, compliance and alignment of the adopted laws, frameworks, policies and standards within the IT departments of government entities. This will ensure that the government’s progress and readiness for digital transformation continue at a steady pace.
Oman to Be a Leading ICT Hub
The Middle East is a region with immense potential for innovation and entrepreneurship, and Oman, despite not having a huge population, is a high-income society with a geographically strategic position in the Gulf region.
Oman has developed a robust ICT infrastructure supporting regional and international connectivity, and it harnesses technology as a tool to boost GDP growth. More could be done to unlock the digital potential in the economy and successfully emerge as a leading ICT hub, but importantly, and to its credit, the country has already started.
Continuing business-friendly reforms, investing in cloud and data center capacity, and boosting ICT capabilities will support the growing numbers of internet subscriptions, both mobile and fixed, of its youthful population and fulfill the promise of a vibrant digital economy.
Oman must make sure that its future is not only about high performance but also about driving best practices and continuous improvement. New products and services will emerge, and capabilities will be extended to different sectors, allowing for a better and more advanced way of life, work and play for everyone. While keeping pace with the requirements of the Fourth Industrial Revolution and creating wider horizons for utilizing modern technologies, it will be exciting to see how Oman will compete with its neighboring countries and stand out on its own business, digital and economic prowess.