Bids called for Oman phone network

Oman's telecoms regulator has invited bids for long-term contracts to build and operate the country's second fixed-line phone network, which would break the monopoly of state-controlled Omantel.

Oman, which already has two mobile phone operators and is also selling a stake in Oman Telecommunications (Omantel), is liberalising the telecoms sector as part of efforts to encourage foreign investment as its oil production dries up.

An official at the Economy Ministry who asked not to be named said Oman was looking for a company that could invest at least $300 million in the first five years.

The country of 2.5 million people is offering a package including a 25-year contract to build and operate a second fixed-line service and a similar 15-year contract for broadband internet services.

Both contracts are renewable. "The provider which will invest most money in the backbone will have the competitive edge over the rest," Naashiah Al Kharusi, a regulatory official, told a news conference.

"The successful bidder will have to pay seven per cent of gross revenues to the government as royalty... (and) pay an upfront fee of 500,000 rials (Dh4771,434) on selection," he said.

The Telecoms Regulatory Authority set August 25 as the deadline for bids, with the licence expected to be awarded by end-October.

Kharusi did not say which companies were expected to bid or what level of investment it was seeking.

Omantel lost its monopoly when Nawras started operations in March 2005.