Omantel issued a disclosure statement to the market late yesterday evening containing the following information:
- The government has agreed to reduce the royalties the company pays from 10% on fixed line and 12% on mobile revenues to a flat 7% effective on 2007 revenues.
- Omantel and Oman Mobile will be merged.
- The government is planning to sell part of its stake in the company to a "strategic shareholder with vast experience in the field of telecommunications." While the exact percentage hasn't been announced, it could be as high as 70% of the government's share in the company, giving the new strategic shareholder just under 50% of the company.
The decision to sell part of the government's stake to "strategic investor" is a biggie. The big question here is who this mystery investor is. Are we talking someone with global experience? The are rumors of a big European operator being interest, I can't recall if it's O2 or Orange. Plus Omantel had initially entered the bid for Qatar's second mobile license with Belgacom, so it too could be a possible partner. Other possibilities include regional companies like Etisalat, Kuwait's Zain (previously MTC Vodafone), Oger, or even Egypt's Orascom which is already heavily investing in tourism projects in Oman. Question is why anyone would want Omantel and how much would they want to pay for it?
Don't get your hopes up too high. With our luck in Oman, we'll end up selling our second rate telecom company to a second rate operator.
Update: Omantel's stock price jumped 10% (limit up) in Thursday's trading.
Bad Bad Omantel Shares