Omantel Group Performance 2011

January December 2011

Presentation to Investor Community
Conference Call
15th February 2012 at 2 PM (Oman Time)

This presentation is prepared solely for the purpose of Conference call with Investor community. This
presentation or its contents should not be distributed without the permission of Omantels concerned
authorities
Slide 1

About us

Slide 2

History: from incumbent to integrated service provider

+2800 employees
~91% Omanization
2004
Establishment of
Oman Mobile

1980
Establishment of
GTO (General
Telecom
Organization)

1996
Launch of
mobile
services
(2G)

1999
Establishment
of Omantel

2005
Omantel
becomes
public (30%)

2008
Operational
integration of
Omantel & Oman
Mobile
Acquisition of
WorldCall

2011
Legal merger of
Omantel and Oman
Mobile
LTE Trial
2009
3G Launch

Slide 3

Omantel today
3 business units and 4 supporting units to provide integrated and customer centric solutions
Consumer
BU
Fixed & Mobile
services to
residential
market

Corporate
BU
Fixed, Mobile &
ICT services to
professional
market

Wholesale
BU
National and
international
carrier activities

57 %

Tier-3 Data Centre

BDU

HR

Finance, Legal,
Procurement
and General
Services

Supports
organization
with regulatory,
marketing,
strategy and
M&A activities

Groups all
employee
related function

Oman Fibre Optic Co

Telecom operator (Pakistan)

Oman Data Park

Network and IT
services

Finance

Associates

Subsidiaries

Worldcall Telecom

Integrated
Network &
Technology

60 %

Manufacturing of optical fiber and cables

Infoline LLC

Slide 4

45 %

3rd party call centre services and BPO

Omania E-Commerce

41 %

49 %

E-Solutions and E-Procurement (Tejari)

Key Leadership Team

Amer bin Awadh al-Rawas,

CEO

Talal Said Al Mamari

Lars O Gustafsson

Samy Ahmed Al Ghassany

Rao K. Chagarlamudi

VP Finance

VP Business Development

VP Integrated Technology

Advisor to CEO

Todd Dick

Haitham Al Kharusi

Ghalib Saif Al Hosni

Sohail Qadir

VP Corporate Business Unit

VP Consumer

VP HR

VP Wholesale

Slide 5

Key achievements

Slide 6

2011: Key Achievements

Subscribers ('000s)
-

500

1,000

1,500

Mobile Market Share

2,000

2,500

Mobile All

2,277

53%
PostPaid (Mada)

Reversed the mobile market share declining

trend both subscriber / revenue share.

Nawras
OM

2,019

Mobile Broadband

276

Fixed

251

Fixed Broadband

47%

First operator in Oman to reach over 2 million

pre-paid mobile subscribers.

2008

259

Pre-Paid (Hayyak)

Fastest growing mobile operator for the

second consecutive year.

59
%

41
%

Reversed the mobile number portability

declining trend more Port in since Oct 2010.
Reverse the declining trend in Wholesale
Revenues.

2011

52

Continued double digit growth in Corporate

Revenues

First to trial LTE-TDD services in Middle East

Voted as Best Telecom Brand in Oman 2011

Completion of successful transformation program and merger

Revenue in RO Mn
525
450

412

375

87

89

81

241

227

234

256

84

96

102

113

ISO Certification for key services.

2008

2009

2010

2011

150
75
0

Best Performance listed company in MSM

Fixed Line
YoY Growth

Slide 7

83

300
225

Best Investor Relations award from Middle East Investor Relations

Society in 2009 & 2010

453

417

411

+ 11%

Mobile
+9%

Wholesale
+3%

Omantel Domestic Network Coverage

2G coverage: > 95 %

3G coverage: ~ 60%

Fixed coverage

Population coverage of 2G
network stood at ~97%

Population coverage of 3G
network stood at 63%

Fixed line household penetration

coverage of 86 % and Fixed
Broadband household coverage of
65%

Slide 8

Brand evolution

Slide 9

Value Propositions

Slide 10

+2,000,000

One number for

Customer Care

Mobile Post-Paid

Slide 11

60 outlets

Mobile prepaid subscribers

Fixed telephony

Android

Home
Broadband

200+ Indirect Channels

Hayyak Liberty

SMS Bundles

1234
Mobile Pre-Paid

Mobile Broadband

Blackberry

Consumer:
Something for everyone

Corporate:
trusted, reliable and credible solution provider
Corporate value propositions in 3 key domains:
Communication
Services

Mobile & Fixed Voice

Mobile Broadband
Mobile CPN
Toll Free Numbers
Blackberry

Core & Access

IP MPLS, ADSL
Digital & Internet
Leased Lines, IPLC
WiFi
VSAT
ISDN

Solutions &
Applications

Hosting (Web, Email)

Co-Location
Data Storage & DRC
Unified Communication
Hosted Contact Centre

Segmented market focus with 40 year history of delivering tailored solutions to

Oil & Gas

Finance

Services

Industry

Government

By a professional Sales team consisting of Sector, Key and Dedicated Account

Managers

Slide 12

Wholesale:
national & international carrier hub
Submarine Cable
Landings

FLAG, Falcon
MENA
GBI
TWA
SMW3
EIG

National

National Interconnect and

Access Services
Mobile Reseller Services
Co-Location
National Roaming
International Voice
Leased Lines

Terrestrial Cables

UAE
Saudi Arabia
Yemen

International

Telehouse

Slide 13

Co-Location &
Hosting
Server Management
Hosted Data Centers
Disaster Recovery
Global Interlink
Peering
Data Backup
Hosted NOCs

538 Mobile roaming

partners
50+ International partners
Co-Location, Cross
Connect & Transit, IPLC &
MPLS

Group Performance

Slide 14

Group Performance Highlights

Impressive Growth

Healthy margin

Group Revenue increased by

8.6% to RO 452.6 Mn.

Net Profit of RO 112.9 Mn.

Domestic Revenues 8.3%

(contributed by Fixed 4.5%,
Mobile 9.4%, Wholesale
9.4%).
Worldcall Revenue increased
by 6.4%.
13% growth in Corporate
revenues.

Slide 15

Maintained Healthy EBITDA

of 53% (46% including
Royalty)
Domestic EBITDA 55%.
(Including Royalty 48%)
Net profit margin of 25% and
increase of 2.3% over last
year.

Strong & growing

subscriber base
Group customer base grown
by 6%. (from 3.530 Mn
compared to 3.329 Mn - incl
WTL).
Continued robust Mobile
Subscriber acquisition Total
Market Growth 4.4%, Oman
Mobile achieved growth of
13.2%. 162% of the total
market net additions (Q42011
Vs Q42010).

Growth in both post & pre paid

mobile subscriber base (7.8%
and 6.6% respectively) and
mobile broadband by 51.4%.

Group Performance Highlights

Market Leadership

Strong balance sheet

Oman Mobile network

subscriber base YoY grown to
2.819 Mn (58.6% Market
share) from 2.491 Mn.

Debt Ratio is 28%.

60.8% revenue share*

(absolute increase of 1.95%
compared to Dec10).
Fixed line market share is
97% (as of Dec11).
Fixed Line Revenue share
85% *

*Note: Revenue market share is based on

estimate, as actual figures are not yet
available.

Slide 16

Group total assets at RO

709.6 Mn.
Net worth of RO 494 Mn.
Net Asset per share is RO
0.658

Impressive market
fundamentals
Dividend Yield 7.6% (based on
closing price of December
2011).
Market Capitalization at RO
0.982 Bn (Dec11).
Price Earning Ratio {P/E
8.80}.
EV / EBITDA 4.12.
Price to Book Value 1.99

Group Performance Highlights

Strong Corporate brand image, Corporate Social Responsibility, Achievements
Omantel supported the Information Technology Authority (ITA) for its National PC Initiative with the
objective to increase the ownership and usage of personal computers amongst certain segments (e.g.
social welfare, students and teachers) of the Omani population. Omantel has provided free internet
service upto one year as part of this initiative. Phase II has stated in Sep2011.
During last Ramadhan, Omantel organized its third Ramadhan Charity Campaign reflecting the values
of (Give, Share & Care). Around 5000 families in all regions have benefitted from the main activities of
the campaign.

Slide 17

Group Performance
Analysis

Slide 18

Performance Highlights
Three Months ended 31 Dec 2011

Year Ended 31 Dec 2011

In RO Mn
2011

2010

Change%

2011

2010

Change%

Revenue

119.5

100.8

18%

452.6

416.6

8.6%

EBITDA

63.4

56.3

12%

238.4

226.5

5.3%

EBITDA%

53%

56%

53%

54%

Net Profit

30.1

27.3

112.8

110.3

Net Profit %

25%

27%

25%

26%

3.530

3.329

Group Customer Base (In Mn)

10%

Note: EBITDA adjusted to exclude Royalty Expenses. Including Royalty, the

comparative EBITDA will be 46% (Yr 2011) and 48% (Yr 2010)

Slide 19

2.3%

6.0%

Revenue
Group Revenue continued its growth and achieved overall growth of 8.6%,
while domestic operation achieved a growth of 8.3%

Consolidated with Worldcall

Domestic Operation

Group Revenue in RO Mn

Domestic Revenue in RO Mn
418.7

500

386.7

452.6

400

416.6

70.8
64.7

400
300
2010

300

2011

Wholesale
200
322.0

200

100

100

0
2010

Slide 20

347.9

2011

2010

2011

Retail

Net Profit and EBITDA

Group Net Profit and EBITDA continue to be healthy

Consolidated with Worldcall

Domestic Operation

Group Net Profit in RO Mn

Domestic Net Profit in RO Mn

120
100
80
60
40
20
0

110.3

112.9

2010
2011

2010

2011

EBITDA RO Mn & %
53%

2010

2011

58%

2011

55%

48%

50%

210

210

Incl Royatly

140
198

227

209

238

Excl Royalty

195
70

0
2010

2011

Incl Royalty

140

70

Slide 21

111.5

280

46%

48%

2010
115.6

EBITDA RO Mn & %

54%

280

140
120
100
80
60
40
20
0

223

2010

201

230

2011

Excl.Royalty

Group Revenue
Quarterly Analysis
Group Revenue in RO Mn

120.0
100.0

110.6 107.7

Revenue by Segment RO Mn

111.5 111.8 109.9

119.5

97.4 100.8

120.0

100.0

25.0

22.7
17.3

80.0

80.0

60.0

60.0

40.0

40.0

20.0

20.0

0.0

57.6

60.6

55.9

60.2

59.5

28.1

24.3

24.2

25.0

27.0

24.2

17.4

16.9

64.3

65.6

66.7

30.0

27.3

28.6

0.0
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Fixed

Slide 22

15.6

25.0

Mobile

Wholesale

OPEX - CAPEX
Consolidated OPEX and Capex movement by quarter
Total Opex (incl Depreciation) by Qtr RO Mn &
Opex Ratio- % to Revenue

85

68% 69%

76% 73% 74% 73% 73% 72% 84%

69%

75
65

54%

55
45
35

105.0

110.0
95.0
75.8

80.0

65.6

65.0
75

75

74

73

83

81

80

86

39%
24%

25
15
5
Q1'10Q2'10Q3'10Q4'10Q1'11Q2'11Q3'11Q4'11

Increase in Opex is mainly due to increase in

employee costs, and depreciation expenses

Slide 23

Capex Additions
(Cumulative) RO Mn

50.0

44.2

43.5

35.0

28.0

21.4

9%

20.0

-6%

5.0

10.9
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Capex to Revenue ratio is at 23% which is higher

by 3% than Q32011.

Net profit after Tax

NPAT Actual Variance Including Worldcall (Dec'11 Vs Dec'10) OR 2.5 Mn

160
+ 1.9

140
+ 6.1

Variances (OR M)

120
+ 4.0
+ 110.3

60

40

20

Slide 24

(8.4)
(11.0)

100

80

(3.3)

+ 25.9

(12.1)
(6.7)

+ 8.5

(2.5)

+ 112.9

Cash Flow
Net Cash from operating activities at 43% of Gross Revenue.
Cash Flow (Cumulative) RO Mn

Assets, Liability & Net worth RO Mn

240

700
23

210

27

180
31

21

250

120

201

28
78

194

23

138

60

30

135
76

14
27
9
8
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11
Net Op. cash flow

Cash & Cash Equiv

Note:
1) Operating cash flow before working capital is RO
214.1 Mn which is 47% of revenue.
2) Cash & Cash equivalent exclude Fixed deposit with
banks amounting to RO 83 Mn and RO 10 Mn+ held
for trading.
Slide 25

662

686

425

475

396

447

-284

-220

-215

-211

400

150

90

550

645

680

670

425

617

657

710

453

480

508

-163

-177

-201

100
-50
-200

-245

-350
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11
Total Assets

Total Liability

Networth

Growth & Market Share

Slide 26

Mobile Market Share

Oman Mobile continue to be the leading mobile operator Subscriber market share including
mobile resellers (58.6%) and Revenue market share (60.8% Estimate)
Mobile Subscriber Market Share Dec2011

Mobile Revenue Share Dec 11

Oman
Mobile
61%

Oman
Mobile,
2,277,481 ,
48%
Nawras,
1,933,061 ,
40%

Nawras
39%
MR (OM),
542,377 ,
11%

1)

2)

MR (NW),
56,329 , 1%

Total Mobile market grew by 4.4% as compared to Q410. Oman Mobile (incl Mobile Resellers)
achieved a growth rate of 13.2%, net addition is around 328.2 K, which is around 162% of total net
additions.
Compared to Q4 2010, Oman Mobile gained 4.5% subscriber share and 1.95% revenue share (in
absolute terms)

Slide 27

Fixed Market Share

Fixed line market share - Subscriber market share (97%) and Revenue market
share (86% Estimate)
Fixed Market Share Dec2011

Fixed Revenue Share Dec 11

Omantel
86%

Omantel,
278,773 ,
97%

Nawras
14%
Nawras,
8,550 , 3%

Total Subscribers Reported 287,323. Omantel including ISDN /WLL subscribers 278,773.

Slide 28

Mobile subscriber base

Quarter to Quarter Oman Mobile Subscriber Base
Oman Mobile Subscribers In 000s
2,124

2,133

2,146

2,277

2,068

2,208

1,975

2,077

1,762

1,849

1,892

1,893

1,827

1,899

1,957

2,019

213

228

232

240

241

247

251

259

2,500
2,000
1,500
1,000

500
0

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Post-paid

Pre-paid

Total

With Mobile Resellers In 000s

2,450
1,850

1,250

2,492

2,449

2,687

2,263

2,489

2,570

2,820

2,408
331

365

358

381

424

479

542

288
1,975

2,077

2,124

2,133

2,068

2,146

2,208

2,277

Q1'10

Q2'10

Q3'10

Q4'10

Q1'11

Q2'11

Q3'11

Q4'11

650
50
OM
Slide 29

MR

Total

Subscriber base
Fixed Line shows marginal increase in Q4 2011. Combined Broadband Subscribers
recorded a growth of 44%
Fixed Line Subscribers In 000s

280

250

Fixed & Mobile Broadband In 000s

300
258

257

252

252

242

243

247

251

250
200

220

150

190
160

100

130

50

100

0
Q1'10Q2'10Q3'10Q4'10Q1'11Q2'11Q3'11Q4'11

101

120

42

44

148

45

182

45

Slide 30

243

47

48

49

276

52

Q1'10Q2'10Q3'10Q4'10Q1'11Q2'11Q3'11Q4'11
Fixed Line

Note:
1) Fixed line include pre-paid and payphone.
2) As per TRA reporting, total fixed lines are 278,773
based on ISDN equivalent telephone lines

213

226

Mobile

Note:
1) Mobile Broadband subscribers including Pay As You
Go (PAYG) is estimated at 897 K as of Dec11.

ARPU
ARPU / Month for major products / services
Mobile services
30.0

28.6

Fixed line services

27.9

28.7

27.1

36.8

35.0

25.0

28.6

30.0

20.0
15.0

40.0

23.3

25.0
20.0

12.6
10.6

9.8

9.7

10.0
10.0

5.0

15.0
10.0

8.2

7.3

7.4

2010

2011

0.0

17.0
15.2

14.5

14.2

13.6

5.0
0.0

2008
Mobile Post

2009

Mobile Pre

Mobile Blended

2008

2009
Fixed Line

2010

2011

Internet

Note:
1) Fixed line include post & pre-paid including
payphone.
2) Internet include Broadband and all internet services
(dialup post &prepaid, dedicated)

Slide 31

Worldcall Performance Year to date comparison (2011 vs. 2010)

Income Statement

YTD revenues for 2011 posted

RO 2.19 mn (6%) {7.2% in PKR}
higher than YTD revenues for
2010.

Actual
Amounts in RO mln

2011

2010

Variance

Revenue

36.14

33.95

6%

(27.41)

(30.45)

-10%

8.73

3.50

150%

(6.34)

(6.96)

-9%

2.38

(3.46)

-169%

(2.39)

(3.68)

-35%

Other income/(loss)

0.47

0.23

106%

Profit/(Loss) Before Taxation

0.46

(6.92)

-107%

Taxation

0.86

1.66

48%

Net Profit/(Loss) After Tax

1.32

(5.26)

-125%

Operating Expenses
EBITDA

EBITDA 2011 posted a growth of

2.5 times over 2010. EBITDA
margin soared from 10% in 2010
to 24% in 2011;.
The YTD bottom line posted a net
profitability of RO 1.3 mn as
against loss of RO 5.3 mn in
2010.

Depreciation and amortization

Operating Profits/(Loss)
Finance Cost

Key Ratios YTD 2011

2011

2010

Net margin

4%

-15%

Operating margin

7%

-10%

24%

10%

EBITDA margin

The Company exhibited a significant operational turnaround as its losses turned

around into profits during the last quarter.
Slide 32

Presented by
Dr. Amer Al Rawas, CEO
Mr. Talal Said Al Mamari, VP Finance
Mr. P.G. Menon, GM Strategic Finance
Omantel
Finance Division (Investor Relations)
P.O Box 789, Ruwi, Postal Code 112, Sultanate of Oman
Website: www.omantel.om, Email: investor@omantel.om

Slide 33