“There’s plenty of room for growth. Firstly, there are many markets where the penetration is 140 percent (which means every customer has on average 1.4 SIM cards), so Oman market is not fully saturated yet,” says Antti Arponen, CEO of FRiENDi mobile Oman, in an exclusive e-mail interview to kishorcariappa.blogspot.com. Read excerpts from the interview.

Do you think Oman has enough business to have five resellers/MVNOs enter the mobile space at once? Do you think all five will survive the initial shake out?

Establishing a mobile service is never easy. On one hand, it requires significant experience in technology, and on the other hand, excellent simple customer understanding. This combination of technical and marketing expertise is very difficult to find (on top of that, you also need millions and millions of dollars of funding of course).

However, in theory, Oman can accommodate multiple new players since there are clear segments –– female crowd, foreigners, football fanatics, university/college students, government workers, people in rural areas, etc. It’s not about the size; if you do it well, you can be a small player but strongly preferred by your small segment. But, yes, being able to operate like that requires a totally new approach to running a mobile service, and since there are no companies in MENA region doing that, there’s not much practical experience here in the region (FRiENDi’s team comes largely from markets where this operational model is everyday life, such as Europe, but obviously we will employ a lot of Omanis, which means that those Omanis will be among the pioneers in the region to have done it themselves, so I hope we can bring some exciting educational aspects to Oman as well).

Has Telecommunications Regulatory Authority (TRA) granted you MVNO license or reseller license? TRA has issued a statement saying none of the five companies have received permission to set up MVNO services.

To be exactly accurate, the license is called a “Class II license”. It allows the licensee to “resell telecom services”. In practice, it means the provider is not allowed to have certain network elements (e.g. radio antennas or switching equipment), but is fully able to build the products, set prices, have customer service, have own SIM cards, have own shops, etc. So in practice, to a customer, there is no difference whether the provider is a so called Class I licensee (Nawras and Oman Mobile), or a Class II licensee (e.g. FRiENDi mobile).

Just as a clarifying note: There are no “MVNOs” in Oman. The correct term that should be used in Oman is “reseller”.

What would be FRiENDi mobile’s strategy to take on other MVNOs/resellers to garner its market share in Oman?

We are happy there’s more competition; it’s good for everyone – the customers, and the existing mobile operators. This has been proven so many times in all other markets. There are only positive effects to increased competition. It may be a bit counter-intuitive why an existing network operator would benefit from this, but in fact it’s quite simple:

a) Increased competition increases the total market size (e.g. people who shared a mobile phone with their family can now afford their own).
b) The MVNO/reseller acquires customers to the network owner’s network.
c) The network owners get most of the revenue anyway.
d) Resellers are more efficient in acquiring those small segments than the big providers (they need to build products that are ok for almost everyone, as you can see in Oman as well).

Has FRiENDi mobile decided on which basic operator to go with (Oman Mobile or Nawras)?

We don’t really like to comment on our internal commercial contracts with any of our business partners.

From the consumer point of view, it is important to understand that already today, for example, Oman Mobile and Nawras share certain pieces of network (e.g. sometimes they use same radio antennas). But more importantly, the network is just a small part of the technology setup.

In case of FRiENDi mobile, all products have been built by FRiENDi mobile –– prices are set by us, customer service is our own, sales locations are set up by us, etc. These technologies have been built for two years now, and are state-of-the art. So for those areas –– which really are important to customers –– we use our own technology (which is built by best technology providers across the world).

How would a customer benefit by preferring an MVNO/reseller to a regular operator (Oman Mobile or Nawras)?

Typically big providers have more or less a one-size-fits all offer. The MVNOs/resellers, on the other hand may offer really cheap prices to those who mostly care about cost, or they can offer football-related features to their football-oriented customers, or they can just have offers that are suitable for people who use 1000 SMS per month, or offer very high-speed internet connection to connect the laptop to internet, or offer calendar and email to small businesses, etc.

Introducing MVNOs/resellers creates a huge change in the way people see the mobile providers. Now, in Oman, there’s not very strong reason why to select Nawras over Oman Mobile or vice versa, and in the future everyone will have a strong reason why to select a certain provider.

It’s analogous to cars: When Ford introduced the Model T, the decision was “either I have a car or not”. Now, with all the brands and models and colours, people can make a personal choice.

According to the TRA, Oman has 2.83 million mobile subscribers in a population of 3.3 million? Do you think still there is scope for growth?

There’s plenty of room for growth. Firstly, there are many markets where the penetration is 140% (which means every customer has on average 1.4 SIM cards), so Oman market is not fully saturated yet.

Secondly, as I mentioned, people are becoming more selective when choosing their mobile provider, so new providers who attract certain customer groups have huge growth potential.

Thirdly, it is worth remembering that if a Reseller X uses Network owner Y‘s network, then any customer who is Reseller X’s customer is also Network owner Y‘s customer. So in that sense the battle over market shares doesn’t change in any way whether there are resellers in Oman or not. Competition simply offers more choice to the customers, and frees up certain network operator’s resources since the reseller would do part of their work.

Will MVNOs/resellers help bring in competitive overseas call rates?

I don’t want to give out any prices at the moment, but international pricing is clearly an area where there is a lot of room for improvement in Oman.

Will FRiENDi mobile focus on youth and expatriates for their growth in Oman?

We’ll inform later about the specific offering, but we are quite sure it will positively surprise certain user groups.

Is FRiENDi mobile planning back office infrastructure?

As I mentioned earlier, almost all of the technology is our own, so yes, we have the technical department who runs that. Also, we have our own customer service, which has a bit of extra twist to it compared to previously seen customer services.

What would be the tentative launch date for FRiENDi mobile in Oman?

Later this year. We’ll let you know the exact date when we can, but honestly we’re not going to give much warning when we do it. It’s a huge big bang when we do it, but the preparations are done in silence.

After two days of break, I can imagine the rush banks will witness when they re-open on Sundays henceforth. Since businesses are open on Saturday, MBD, the banking hotspot, will be jam-packed more than before. Personally I avoid going to banks after 9am. That is the time when parking space around MBD gets full, and there are serpentine queues in front of customer care executives. It is a hopeless situation. For a two-minute task, you end up spending close to an hour – first hunting for parking space and then waiting patiently for your turn in long queues inside bank.

I got a SMS from Bank Muscat to collect my new debit card. I tried today in the morning to visit the bank, but parking space eluded me. So I cancelled my plans for the day.