The document provides an overview of the telecommunications market in Oman in 2005 from the Telecommunications Regulatory Authority (TRA). Some key points: - Competition was introduced in the mobile sector in 2005 between Oman Mobile and Nawras, leading to a decline in mobile prices and increased choices for customers. The mobile teledensity reached 56.4% by the end of 2005. - The number of mobile subscribers grew 65% to over 1.33 million in 2005. Prepaid subscriptions increased significantly faster than postpaid. - TRA liberalized the sector and issued new licenses to encourage competition. It also worked to ensure fair prices and efficient management of numbers, frequencies and equipment. - Mobile

1. 1
Telecommunications Regulatory Authority
Sultanate of Oman
July, 19, 2006

2. 2
CHAIRMAN OVERVIEW
I really feel privileged to present to you the second Annual Report of TRA, focusing
the key activities of the Authority during 2005.
Last year has been a landmark year in terms of liberalization of the
telecommunications sector culminating in the introduction of competition in mobile
sector. The competition between Oman mobile and Nawras was conducive to a
decline in prices and customers were able to base their choice on many aspects such
as quality of service, customer care, tariff and network coverage. Another remarkable
achievement due to competition was the country’s mobile teledensity reaching up to
56.4 percent, where the number of total subscribers reached 1.333.225 in December
2005 with growth of 65 percent since the previous year.
One of the major functions of the Authority is to safeguard the interests of
beneficiaries of the telecommunication services in respect of the prices of the
telecommunication equipment, quality and efficiency of the telecommunication
services provided by its licensees. With this objective in view, the Authority had
examined different tariff proposals filed by operators and ensured fairness of the
prices and facilitation of market movement towards a competitive tariff regime.
TRA is also responsible for efficient management of the national numbering
resources. TRA implemented a new 8 digits numbering scheme for both Fixed and
Mobile services to cater for numbering requirements for next 20 years.
During the previous year, the old 3 digits short codes were changed to 4 digits short
codes. These short codes are used by telecommunication network operators to
provide particular services exclusively to their subscribers and also used for public
services such as emergency services etc. TRA had also instructed the mobile
operators to implement Mobile Number Portability (MNP) and these directives are
expected to be an impetus to further competition in the Mobile Market.

3. 3
One of the major issues that were dealt with by TRA in the foregoing year was the
preparation of the National Frequency Allocation and Assignment Plan to ensure the
efficient management and use of radio spectrum.
On the other hand, TRA played a dynamic role by participating in Arab, regional and
international meetings and conferences. TRA actively participated in FTA negotiations
that were held between Oman and USA in the fields of telecommunications sector,
electronic commerce and cross border trade services.
I am proud to acknowledge the hard work and efforts done by members and
employees of the TRA to fulfil its objectives. We appreciate the cooperation of the
management of all telecom service providers to bring about TRA’s efforts to a
success in executing the tasks assigned to it.
On behalf of the members, I feel honoured to express our sincere gratitude to His
Majesty Sultan Qaboos Bin Said for his revolutionary vision and support to expand
telecom sector throughout the Sultanate effectively and efficiently.

4. 4
The Organization
The Telecommunications Regulatory Authority is a body corporate established under
the Telecommunications Regulatory Act issued under the Royal Decree No. 30/2002
as a result of Government's initiative to liberalize the telecom sector in Oman and
transform the monopolistic telecommunications market into a competitive one. Until
2002, the national telecommunications network and services in Sultanate of Oman
were owned by the Government (formerly known as the General Telecommunications
Organization, GTO) and the Ministry of Transport and Communications preformed the
role of telecommunications policy maker, where the Minister acted as the Chairman
of the Company.
Such transformation required regulatory intervention to permit viable competition to
emerge and to facilitate transparency in the liberalization process. As a separate
entity, TRA implemented the Government policies in an objective and impartial
manner, and as competition in the telecom market proceeded, the ability of TRA to
act towards all market participants independently from the Government and
operators was enhanced.
The Staff and Management Team
When first commenced its operation in 2002, a minimum of three members of a
temporary committee were appointed in TRA with the Minister of Transport and
Communication the Chairman of the Authority. In 2002, as TRA was established,
there were few employees recruited, and as the responsibilities and functions of the
Authority grew, the number of staff increased. By the end of 2005, there were five
(5) directorates with 17 departments in TRA and a total of 62 staff working under the
organization.
1. The Telecommunications Regulatory
Authority

5. 5
In selecting its team, TRA paid a great attention on the qualification level,
professionalism, efficiency and independency of the individuals selected and the
degree of proficiency and expertise of the managerial working party. The
management team in TRA comprises individuals with many years of experience in the
field of telecom in all its technical, economical, financial as well as legal aspect.

6. 6
In its successive third year, TRA has accomplished a great deal in terms of regulating
and monitoring the telecom sector in the Sultanate. In 2005, TRA continued to fulfill
its objectives and duties that lie in ensuring that telecommunications services are
supplied in a manner consistent with national perceptions of the public interest,
fostering competitive markets to promote good quality of services, new technologies,
affordable prices and efficient supply of telecommunications services. As part of its
responsibilities, TRA aims at creating a favorable climate to promote public
confidence in telecommunications markets through transparent regulatory and
licensing process. TRA as well, persist in protecting consumer right and considers it
as a vital objective, it therefore strives to ensure customers' satisfaction in the quality
of telecom service and the availability of services for all users.
In order to execute its objectives, TRA attempts progressively to remove all barriers
to market entry and allow interested investors to enter the Omani telecom market. It
is not the objective of TRA to be involved in detailed management of the sector;
instead it is mainly involved in maintenance of a regulatory environment conducive to
the efficient supply of telecommunications services to the public.
Among its diverse responsibilities, TRA is accountable for monitoring the telecom
market in its economical aspect, which constitutes reducing barriers to entry, creating
strong market growth, rapid innovation, and ensuring no unfair cross subsidy of
services. Apart from the economical aspect of regulatory basis, technical and radio
spectrum management are two other main areas of Authority's operations, ensuring
efficient use of natural and scarce resources of radio spectrum, numbers and rights
of way.
2. TRA Regulatory Framework

7. 7
Duties and Functions
TRA implements the approved general policy for the telecommunications sector in
accordance to the programs prepared by the Authority for this purpose, and
particularly, it is liable to propose policy implementation strategies regarding
Universal Access in the Sultanate of Oman to expand telecommunication access
networks to cover a wider proportion of the population and geographical areas.
The Authority also prepares all necessary programs and plans to develop the general
policy of the telecommunications sector. The policy , international representation and
legal affairs directorate of the Authority assists in this regard by identifying the
policies for the telecommunications sector, proposing suggested changes on the
existing policies necessary for the betterment of the telecom sector, and reports on
the long term effects of alternative policies on domestic and international telecom
industries and services.
The TRA in managing the radio spectrum prepares national frequency allocation plan
and determines the telecommunications systems and services that can be undertaken
by radio licensee. It also prepares proposed amendments to radio licenses, and
allocates and monitors the provisions of the use of radio spectrum in accordance with
international treaties to which the Sultanate is a party.
All telecommunications equipment are administrated by TRA, who issues approvals
for the use of telecommunications equipment for which no technical specifications or
standards have been determined, and prepares the necessary technical specifications
and standards for import and use of telecommunications equipment besides setting
obligations of such equipment.
TRA ensures that operators execute the terms and conditions as per their licenses,
and all proposed interconnection agreements between the operators should be
approved by the Authority. Furthermore, national numbering plan allocated to
operators beside domain name allocation all are set and supervised by the Authority.

8. 8
Sultanate of Oman realized the importance of a liberal telecom market regime in
developing the economy and enhancing the private sectors. As part of the national
strategy and Oman's commitments to the WTO, the liberalization plan was set in
action in 2003 under the regulation of TRA.
Seeing the growth trend of mobile services around the world and the excessive
demand for it, it was important for TRA to initiate competition in mobile services. The
benefits of competition will facilitate efficiency, reduction of prices, increase
investment in infrastructure and better customer choices.
The competition introduced in the mobile sector created a healthy market
environment where resources were allocated appropriately and fairly. The instigation
of competition between Oman Mobile Company and Nawras allowed prices to decline
and customers could base their choices on many aspects such as quality of service,
customer care, tariffs and network coverage.
Issuance of Telecom Licenses
In the course of liberalization and open market reform, licensing process is generally
regarded as one of the most important regulatory processes undertaken by the
Authority. The TRA is responsible for the preparation of licenses, and qualification
criteria, analysis of the requests for licenses and to monitor the obligations of the
service providers.
In order to form a liberal telecommunications sector, TRA intends to open
competition for other telecom services gradually. Currently there is one Basic Public
Fixed Telecommunications operator and two Basic Public Mobile Telecommunications
operators in the market. TRA is considering introducing competition in the Basic
Public Fixed Telecommunications Services for local access, long distance and
international carriage. TRA had announced its intention to appoint a consultant to
3. Liberalization of the Telecom Sector

9. 9
assist in the introduction of competition and preparation of licenses for Basic Fixed
Public Telecommunications Services, and Public Data Network services.
As well, TRA will soon open the telecom market for Class II those who meet the
qualifying criteria. TRA is also in the process of formulating regulations and
procedures for issuance of Class III licenses. The objective is to introduce new sort of
technologies and services in the market and provide customers with greater range of
choices at lower prices.

10. 10
0
200000
400000
600000
800000
1000000
1200000
1400000
NumberofSubscribers
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Month
Figure 1. Number of Mobile Subscribers in
2005
Telecom sector is one of the most important sectors of the economy. Over last year,
the sector has witnessed significant changes such as competition in mobile that
helped in bringing efficiency and good quality of services at competitive prices.
As to date, there are three leading telecom service providers in the Omani telecom
market; Oman Telecommunications Company; the sole provider of basic access
services and internet, Oman Mobile and Nawras are basic mobile communications
services operators. The following sections discuss growth of telecommunications in
these services.
Mobile Communication
As the new operator; Nawras commenced its services during 2005, radical
transformation was observed in the Omani mobile market, due to competition
resulting decline in prices of services offered and enhancement in their quality of
services. The two mobile operators witnessed several developments during the year
reflected in their mobile usage, tariffs, quality of service as well as traffic.
Mobile Usage: Although competition in the cellular mobile sector is still in its
infancy stages, yet it
has created a wave of
transforms in the
mobile sector. Figure 1
shows the trend of
monthly mobile
subscribers in 2005.
Source: Oman Mobile and Nawras
4. Telecommunication Market Statistic

11. 11
Figure 2. Number of Post-Paid and Pre-
Paid Subscribers in 2005
0
200000
400000
600000
800000
1000000
1200000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Month
NumberofSubscribers
Post Paid Pre Paid
There were 1,333,225 subscribers for both pre-paid (1,080,113) and post-paid
(253,112) by both operators by the end of the year 2005.
The annual comparison of mobile market performance shows that the number of
mobile subscribers increased by 65 per cent from 806,280 in December 2004 to
1,333,225 subscribers in December 2005. The entry of Nawras has no doubt
increased the demand for mobile services as prices declined due to competition.
Prepaid and Postpaid
Analysis shows that the demand for pre-paid exceeded the demand for post-paid in
the Sultanate, which could be due to the convenience use of pre-paid services
compared to the post-paid. As revealed in Figure 2, the number of mobile pre-paid
subscribers increased by 97 per cent whereas the number of post-paid subscribers
decreased by 1.6 per cent compared to the last year. The pre-paid subscribers
represented 81 per cent of the total market by December 2005, while post-paid
subscribers constituted around 19 per cent, which is in line with the international
trend.
Source: Oman Mobile and Nawras
Figure 2 shows the trend of in both pre-paid and post paid subscribers from
January to December 2005.

12. 12
Market Share
With 1,089,355 mobile subscribers, the Oman mobile share in the market was 81.7
percent by the end December 2005 and it continued to have dominant market power.
This is naturally expected in the first few years of competition as Oman Mobile was
the sole and dominant mobile service provider under the roof of the incumbent. By
December 2005, the market share of Nawras was 18.3 percent and its total number
reached at 243,870. On average, the monthly average growth in number of mobile
subscribers was 23,590 and 27,100 for Oman Mobile and Nawras respectively.
Mobile Teledensity
Teledensity is an important indicator widely used to describe the mobile subscribers
as a percentage of population. The mobile teledesity was 56.4 per cent in december
2005 comapred to 34.1 per cent in December 2004. Although increasing, the
penetration rate in the Sultanate still remains low compared to regional countries.
Mobile Tariffs
As competition intensifies, the movement of mobile tariffs is in continuous decline
and each operator is striving to offer attractive prices to its customers. Oman Mobile
has made several changes in its tariff plans. The most significant change was the
introduction of flat rates for pre-paid voice tariffs in March 2005. Prior to the flat rate
tariff, the tariff was distance-based ranging from 12.5 baiza per minute to 100 baiza
per minute depending on the distance slab. The new system came in line with the
launch of Nawras on 16th
of March 2005.
Pre-paid Tariff
Both operators have reduced their activation fee from R.O 19 to R.O 14. Oman
Mobile has reduced its off-peak voice tariffs from Bz.55 per minute to Bz.45 per
minute while Nawras has reduced its tariff from Bz.55 per minute to Bz.39 per
minute. In addition, SMS charges became standard one at Bz.10 per massage for
both Oman Mobile and Nawras, whereas prior to that, SMS during peak hours was
costing Bz.20 and Bz.10 during off-peak hours by both the operators.

13. 13
It is perceptible that competition between Oman Mobile and Nawras instigated review
of pricing. Competition between the two operators is not only based on price
reduction strategy where one has greater advantage in prices; it is also based on the
differentiated products they offer. Each company attempts to make additional offers
and introduce new technology-based services to stimulate more customers, such as
offering promotions on regular basis.
Post-paid Tariff
In terms of post-paid products, Oman Mobile's average price per minute is Bz.40,
while Nawras offers Bz.39 per minute for calls to Oman Mobile and Omantel and
Bz.19 per minute on calls from Nawras to Nawras. Operator's tariffs depend on
interconnection cost. Nawras, for example, is charging more for calls made off-
network seeing that it involves higher cost for interconnecting to other networks.
Customers' choice between the two products should be based on cost-effectiveness.
An average per minute call from Oman Mobile network to other networks would be
Bz.40, while a call from Nawras to other network such as Oman Mobile and Omantel
will cost Bz.39 per minute and will cost Bz.19 per minute for calls within Nawras
network. For customers with regular calls within Nawras network, it would be
economical to subscribe to Nawras network, and for customers with regular calls to
Oman Mobile and Omantel, there would be minimum differences between the two
products (average of Bz.40/ min for Oman Mobile compared to Bz.39/min for
Nawras), noting that both Nawras and Oman Mobile offer identical monthly rental fee
of R.O 3 per month (Nawras reduced its monthly fee from R.O 3.9 per month to R.O
3 per month).
Oman Mobile introduced two approaches to attract more customers into its market,
one is the "Mada Plan", which facilitates customers to budget their monthly calls and
enables them to plan in advance accordingly. The plan was introduced in April 2005
as an attempt to make the post-paid service attractive and compatible to pre-paid
services. The second strategy was the "Family and Friends discount" concept, which
offers 10 per cent discount for calls made by an Oman Mobile subscribers to two

14. 14
Figure.3 Fixed-line Post Paid and Pre Paid Subscribers in 2005
0
50,000
100,000
150,000
200,000
250,000
300,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Post Paid Pre Paid
specified lines within Oman Mobile's network. Nawras, on the other hand introduced
the Bz.19 for On-network calls to attract more customers. Both Nawras and Oman
Mobile tactics aim to entice more customers into their network. Both the operators
are striving for expanding their respective subscriber-base and are offering promotion
tariffs. The promotions have become a permanent feature of their marketing strategy
and throughout the year there is some promotion going on by each operator.
Fixed Line Service
Although the number of fixed line subscribers has been increasing, the growth rate
on the other hand has been steady. Figure.3 shows the monthly change in post-paid
and pre-paid fixed line subscribers from January to December 2005.
Source: Oman Telecommunication Company
The number of subscribers has been growing on average 1500 per month from
January to December 2005. By end of December 2005 the total number of fixed line
subscribers were 265,237 compared to 246,978 subscribers in December 2004 (7.4
per cent increase). Figure.4 shows the fixed line subscribers by region. As seen in the
graph, Muscat has the largest fixed line subscribers followed by Batinah and lastly is
Wusta.

15. 15
Figure.4 Number of Fixed-Line
Subscribers by Region
204
2766
39164
14351
18321
23212
17126
109776
-20000
0
20000
40000
60000
80000
100000
120000
Muscat
Dhofar
Dakhaliya
Sharqiya
Dhahira
Batinah
Musandam
Wusta
Regions
NumberofSubscribers
Penetration rate
In terms of teledensity, basic access
service still maintains low penetration
rate compared to regional countries. In
December 2005, the rate was 11 per
cent, and remained low as compared to
Source: Oman Telecommunication Company
the regional countries and not improved much since December 2004, where the rate
was approximately 10.65 per cent. Low teledensity could be due to limited coverage
within the Sultanate areas, or it could be due to low demand for the service due to
substitution of mobile.
Post-Paid and Pre-paid
The pre-paid service "Sahl" for fixed line has been increasing over the year, reaching
25,422 subscribers in December 2005, as compared to 10,019 in December 04
showing an increase of 54 per cent. While post-paid still remains static increasing at
a lower rate as shown in figure.3 above.
Internet Services
Internet service is also provided by Oman Telecommunication Company. There are
four main types of internet service that Omantel provides; pre paid Ufaq, dial-up
subscription, ADSL, other broadband and leased line services. Omantel introduced
the ADSL service in December 2004; however the service was available for
residential customers in January 2005. Internet subscribers were 49,425 in December
2005 compared to 47,732 in December 2004 (3.5 Per cent increase). On average, the
number of dial-up internet subscribers has been decreasing over the months, which
is mainly due to prepaid Ufaq and higher demand for ADSL than dial-up service.

16. 16
Figure.5 Internet subscribers in
2005
dial-up
41,086
ADSL
8,339
dial-up ADSL & Leased Line
Nevertheless, the market share for dial-up subscribers is higher since ADSL was only
introduced recently in December 2004 and
relatively expensive for those who have limited
use. The number of ADSL subscribers has
increased by an average of 680 subscribers per
month from January to December 2005.
Figure.5 demonstrates the number of internet
subscribers for dial-up, ADSL and leased line in
the third quarter of 2005.
Internet Prepaid “Al-Ufaq”
Another major access to the internet is through prepaid cards called Al-Ufaq. This
allows customers to access internet with a duration determined by the value of the
card. Prepaid internet cards are good for budget conscious consumers. Omantel
offers two types of cards with a value of RO 6 and RO 10 having duration of 20 and
41 hours respectively. Omantel sold approximately 594, 400 hours through 16,600
cards for RO 6 denomination (332,000 hours) and 6,400 for RO 10 denomination
(262, 400 hours) in December 2005. The number of hours sold in December 2005 is
35 percent higher than the December 2004 which indicates that the use of prepaid
internet cards is increasing substantially over the period of time.
Cyber café
Cyber Café is a popular source of internet use. Most of the people who do not have
PC at home use Cyber café for internet, being cheaper and convenient. There is
increase in the growth of internet Café from 80 in December 2004 to 124 in
December 2005. Most of the cyber cafes are in urban areas (more than 100 in
Muscat only). There is need to expand this facilities to other cities and rural areas
too.

17. 17
Tariffs
One of the major functions of the Authority is to safeguard the interests of
beneficiaries of the telecommunication services in respect of the prices of the
telecommunication equipment and quality and efficiency of the telecommunications
services provided by its licensees. With this objective in view, the Authority had
examined different tariff proposals filed by operators during the year 2005. The main
thrust of the Authority while examining such proposals was to ensure fairness of the
prices and facilitation of market movement towards a competitive tariff regime. The
approved tariff proposals ranged from marketing promotions to new service tariffs.
However during the period under report most of the proposals focused on the
promotional offers.
For instance Wireless Hotspots Internet service was approved during the year as a
new service to be offered by Omantel. Any filed proposal is assessed based on the
possible market outcomes, impact on competition and consumer welfare.
The year under report was the first year of competition in the cellular mobile sector
in Sultanate of Oman. After launch of Nawras in March 2005, a number of
competitive offers were introduced by the new operator. In response to the
competitive offers of the new entrant the incumbent operator also tried to come up
with matching new options and better offers for the subscribers. Major focus of the
operators remained on attracting the new customers and increasing their customer
base. Most of the offers were of promotional nature restricted to 2-3 months in order
to test the grounds. However, this year witnessed quite innovative and non
traditional pricing offers from both the operators.
Interconnection
In the telecom market, the interconnection is a corner stone of competition. Since
the introduction of competition in the Omani telecom market, the Authority had
realized that Interconnection will be a central and essential factor for facilitating
5. Economic Activities

18. 18
competition. To this end, the Authority is doing its best to ensure that
interconnection between operators is based on fair and judicious arrangements and
the dominant operator does not take undue advantage of its market power. In order
to achieve this objective, the Authority put a lot of stress on developing a regulatory
framework, which can ensure quick and smooth interconnection agreements between
the parties. As a common practice world over, use of Reference Interconnect Offer
(RIO) is considered a very useful tool for this purpose. The incumbent operator was
thus mandated to produce RIO for its interconnection services. The draft produced
has been shared with the new entrant and other potential licensees and stakeholders
for their input. The new entrant has been given the opportunity to negotiate the
terms and conditions of RIO. Although these negotiations are not yet conclusive,
however, these are a step forward to achieve a balanced and fair interconnection
regime in the telecom market in the Sultanate Oman.
Since the final agreement could not be reached between the operators, the service
providers are operating under Interim Interconnection Agreements, awaiting the
determination to be given by the Authority mainly on the level of interconnection
charges for different interconnection services. In order to be fair and transparent and
to use international experience for this very critical and complex issue, the Authority
decided to engage an international consultancy. The consultant has been hired,
which will advise the Authority on a number of interconnection pricing issues. The
consultant’s report will be of vital importance in issuing the determination and setting
the basis for fair Interconnection in the market. The report of the consultant is
expected to be finalized by the second quarter of next year. The Authority will then
issue a determination on the issues in dispute between Nawras, Omantel and Oman
Mobile.
Consumer Affairs
Under the Telecom Act 2002, TRA has statutory role to protect consumers interest.
In carrying out this responsibility , the TRA seeks to ensure access of
telecommunication services to all citizens at affordable prices. The ideal mechanism
to achieve this objective is competition. However, 100% achievement of this

19. 19
objective cannot be ensured and all administrations through out the world undertake
a number of policy and regulatory initiatives towards this end. The TRA try to achieve
these objectives by providing relevant information to the consumers and handling
complaints against operators. The consumer complaints are given high priority and
the operators are directed to address the complaints within the shortest possible
time. Most of the consumer complaints pertained to billing accuracy and un-solicited
SMS messages. The Authority has directed all operators to ensure that their systems
are capable of providing detailed billing information upon request from a consumer.
USO
Universal Service ensures that basic fixed line services are available at affordable
price to all citizens across the Sultanate. However, it is not possible to provide basic
telecom services to citizens on commercial terms because of non-viability of business
potential in far flung and sparsely populated areas. As a part of the TRA’s
responsibilities; in 2005 the Authority initiated the process of formulating Universal
Service Policy. This policy would be aimed at creating suitable mechanism in the
Sultanate, whereby the Government can ensure Universal Access to all its citizens. If
required, the help of international consultants would be sought. This policy will create
a mechanism for providing universal services, participation by the operators and
service providers, and ensuring sustainability of such projects in the long run. There
is a plan to test the framework through implementing a pilot project.
In -house Studies
The TRA conducts in-house studies periodically to assess and evaluate market
performance; these studies included among others mobile, fixed and internet
services. In 2005, the Authority through the Internal Planning, Control and Statistics
department carried out a study in collaboration with Sultan Qaboos University
(Communications and Information Research Centre) to investigate the gender's
usage and access to Information and Communications Technologies (ICTs). The
result of the study was presented in WSIS exhibition "ICT 4 All" in Tunis in November
2005.

20. 20
Numbering & Domain Names
Article 8(3) of the Telecommunication Act 2002 has granted the responsibility of
managing the national numbering resources and domain names to TRA.
In 2004, TRA implemented a new 8 digits numbering scheme for both Fixed and
Mobile services to cater for numbering requirements for next 20 years. On 17th May
2005, TRA published a Ministerial Decree No. 4/2005 stating that TRA shall charge
operators for the allocation and reservation of Numbers and Short Codes. The
charges were established to only cater for the cost of management of the national
numbering plan.
Following the entry of Nawras in the Oman mobile cellular market, Nawras was
allocated a new number level (95 xxx xxx) to be used for providing services to their
subscribers. A new Mobile Network Code1
(03) was also allocated to Nawras.
TRA received quite a few numbering applications from telecomm operators during
the year 2005. The main point of concern before the approval of such applications,
were ensuring that the numbers will be used in accordance to the National
Numbering Plan and will be used effectively and efficiently to preserve the numbering
resources.
During 2005, TRA has also changed the old 3 digits short codes to 4 digits short
codes. These short codes are used by telecommunication network operators to
provide particular services exclusively to their subscribers and also used for public
services such as emergency services etc.
1
Mobile Network Code (MNC): The MNC is the second field of the International Mobile Station Identity
(IMSI) and is two to three digits in length. The MNC, in combination with the Mobile Country Code, uniquely
identifies the home network of the mobile terminal or mobile user.
6. Technical Activities

21. 21
TRA had also instructed the mobile operators to implement Mobile Number Portability
(MNP) and these directives are expected to be an impetus to further competition in
the Mobile Market. MNP is the ability for a GSM mobile subscriber to change the
subscription network within a portability domain whilst retaining his original mobile
number.
In the Domain Names area and during the year 2005, TRA has been negotiating with
Omantel (the incumbent Internet provider) to relinquish the registration of Domain
Names to TRA as this is TRA’s responsibility according to Article 8(3) of the
Telecomm Act. TRA also drafted a dispute settlement policy for any disputes between
two parties in the registration of a domain name.
Standardization
The Authority identifies and analyzes the impact of new network technologies that
will necessitate significant changes in the Authority's regulations. The effect of major
Authority actions on the deployment of new technology and advanced
telecommunications capabilities are also analyzed by TRA.
During the year under report, TRA Developed a Code of Practice for Liability and
Limitations on ISPs. It also continued the process of preparing the WLAN regulations
and investigates the technical solutions for National Roaming issues between
operators.
Quality of Service
TRA considers Quality of Service as one important aspect to be carefully monitored
by the Authority. Periodically, TRA follows up with the operators on their license
obligations regarding Quality of Service and carries out drive tests to verify Mobile
Networks performance. In 2005, TRA obtained a test drive tool that facilitates mobile
networks performance checks. There were several test drives conducted during the
year and a report in this regard was issued to assess performance.

22. 22
Figure.6 Granted Approvals in 2005
177
52
82
311
0 100 200 300 400
Radio
Terminal
GSM
Total
TypeofTelecommunications
Equipments
Number of Granted Approvals
Figure.7 Imported Telecommunications
Equipments
1164
36695
62351
100210
0 20000 40000 60000 80000 100000 120000
Radio
Terminal
GSM
Total
Typeof
Telecommunications
Equipments
Number of Imported Equipment
Type Approval
The type approval department of the Authority is in charge of identifying new or
novel products submitted for equipment authorization and performs radio
interference analysis to
determine the impact of
new radio equipment on
users of the frequency
spectrum. As dealers and
users apply for certain
equipment, the TRA
approves and authorizes
the use of these
equipment subject to test
results and regulations of the Authority.
TRA registered 466 dealers for telecom equipment and systems including GSM during
the year 2005, 82 approvals for GSM hand sets, 52 for other terminal equipment and
117 for radio equipment (Figure 6). Moreover, 36,695 terminal equipment and
systems, 62,351 GSM, and 1,164 radio equipment and systems were imported
through official channels during the period under review (Figure 7 refers).

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TRA is responsible for radio spectrum management. The Radio Frequency Allocation
Assignment and Planning department has prepared National Frequency Allocation
and Assignment Plan to ensure the efficient management and use of radio spectrum.
It supports a large number of communications services, particularly for aviation,
shipping, defense services, public safety and mobile telephony. The plan is prepared
according to International Radio Regulations and in line with the international
practices. The national frequency allocation and assignment plan will be implemented
after the required approval from the Frequency Spectrum Allocation Committee that
has been formulated by decision of Council of Ministers and chaired by H.E. Minister
of Transport and Communications.
In order to implement the plan, it is necessary to have a migration plan, where
frequencies can be re-allocated according to the up-coming plan. The migration plan
was also prepared during 2005 after getting the list of used frequencies with
technical specifications from all users. Currently, the plan is with the Frequency
Spectrum Allocation Committee for final approval.
The major function of the department of Frequency Allocations is to assign
appropriate frequencies to radio-communications equipments. It is the responsibility
of TRA to ensure national coordination of frequencies and in cases of radio
interference; it is the responsibility of TRA to provide appropriate solutions.
RRaaddiioo LLiicceennssiinngg
Radio frequency spectrum is available for radio based services such as cellular mobile
communication, aircraft, ship & costal, HF/VHF/UHF, private land mobile/fixed radio,
trunking, GMPCS, microwave, WLL, VSAT, point to point and point to multipoint radio
data networks. The use of radio equipment in the Sultanate of Oman requires radio
license from TRA under Telecom Act 30/2002. The Radio Licensing department
7. Radio Spectrum Management

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process all such applications/ requests and ensures that licenses are maintained in a
manner which maximizes the efficient use of available spectrum. As of December 31,
2005, the total number of radio licenses issued was 8570 of these 6625 were
renewed.
The Aircraft Radio licenses are issued for use of radio transceivers equipment located
on board aircraft and operating within the aeronautical frequency bands to airport
control towers. During 2005 TRA issued 4 new licenses in this category. While 12
new licenses were issued for two way communications for ships during 2005 as
compared to 18 licenses in 2004. The use of radio for ships helps passenger vessels,
ships, and fishing vessels to communicate. Finally, the most of radio licenses were
issued for fixed and mobile services, where 1929 new licenses were issued in 2005 as
compared to 1260 licenses in 2004.
Monitoring and Inspection
In granting radio frequencies, the TRA verifies applicants planned location of radio
equipment before installation and controls the authorized equipment for proper
application in conformity with the licensing conditions. Prior and following final
granting of radio licenses, the TRA carries out pre-license and post-license conformity
inspections The aim is to control the frequency usage consequently to detect any
illegal usage (Unlicensed) of the spectrum. The Frequency department has initiated a
project to monitor frequency systems. The project is in its first phase and TRA is
training its staff to familiarize them with the new system. Phase I of the project is
completed during the year 2005.

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TRA is the main jurisdiction in charge for follow up of legal and regulatory issues of
the telecommunications sector, when necessary, TRA arbitrates disputes between
operators, solves conflicts, and identifies possible illegal actions of the operators /
service provider's enablers for possible development of enforcement actions.
TRA actively participated in the FTA negotiations and contributed its input issues
related to it especially on the chapter dealing with telecommunications, and
Electronic Commerce and Cross Boarder Trade Services.
A committee was formed by the Ministry of National Economy to look into Electronic
Commerce legislation and TRA played an active role in it. The inputs of TRA on the
legislation draft were substantial especially in the gap analysis document of Electronic
Transaction and Commerce Act.
Drafts on dispute regulations to be instigated by operators as well as on licensing
framework for Arab network were prepared by TRA during 2005. In later stages, TRA
initiated a proposal to play an active role in Telecom Policy and Legislation
Committee of Arab/GCC countries.
8. Legal Activities

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Global Symposium of Regulators and World Summit on Information Society
(WSIS)
The most prominent events of the year were the Global Symposium of Regulators
and the World Summit on Information Society (WSIS) both held in Tunis. The Global
Symposium of Regulators is a meeting held annually by regulators that is evolved in
size, scope and importance. During the Symposium, experts discusses array of issues
related to telecommunications and allow countries to present their opinion and point
of views on various issues related to telecommunications.
The World Summit on Information Society (WSIS) on the other hand was held under
the high patronage of the United Nations Secretary-General, Mr Kofi Annan, with the
International Telecommunication Union (ITU) taking the lead role in its preparation.
The objective of the summit was to develop and foster a clear statement of political
will and take concrete step to establish foundations for an information society for all,
reflecting all the different interests at stake and find solutions and reach agreements
in the field of internet governance and financing mechanism. Delegates from
Sultanate of Oman attended these meetings and TRA actively participated as a part
of the delegation and gave political support to the Tunis Commitments and Tunis
Agenda for the information society that was adopted on 18th
November 2005. More
than 19,000 participants from 174 countries attended the Summit.
International Telecommunication Union (ITU.D)'s Development Sector
Study Groups 1 & 2
For the third year in a row, TRA contributed in the workings of the International
Telecommunication Union (ITU.D)'s Development Sector Study Groups 1 & 2. The
study groups were developed in order to allow telecom experts, regulators and other
interested bodies to make authoritative recommendations related to the technical
work of the ITU through extensive studies. Eng. Naashiah Al-Kharusi, TRA's
temporary committee Member is the Vice-Chairman of ITU-D Study Group 1 for
9. International Events

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Telecommunication Development Strategies and Policies. The study group will
accomplish the tasks by the end of the year 2006.
Meetings and workshops
During 2005, TRA participated in various meetings, workshops and conferences at
regional and international level notably those which were conducted by the ITU and
the GCC. Some of the regional workshops/meetings were ITU/IBDT Arab Regional
Workshop on Universal Access and Universal Services Policies (Amman, Jordan),
General Assembly Meeting of Arab Centre of Excellence CoE/ARB (Cairo, Egypt), The
Pan Arab Conference on WSIS-Phase II, An Arab Regional Dialogue (Cairo, Egypt),
and Regional Information Meeting and Workshop related to the Administration of the
Arab Group of Countries (Damascus, Syria).
They covered almost every aspect of telecommunication, the most significant issues
were frequency spectrum, standardization, interconnection and price regulations,
access to broadband, universal service opportunities, core statistical indicators for
Information and Communication Technology (ICT) and cyber and network security.
Visit to Regulatory Bodies
In order to enhance the skill and expertise of TRA’s employees, seniors and juniors
staff of TRA visited the Telecommunications Regulatory Commission Jordan to gain
knowledge from their experiences which are at advance stages of liberalization
process. Moreover employees also visited to TRA Telecommunications Regulatory
Authority, UAE for exchanging experiences.
ITU/BDT Regional Workshop on "Interconnection and Price Regulation at
Muscat
In addition, TRA also hosted a workshop on "Interconnection and Price Regulation".
The workshop was seen as an important event as to gain experience from other
national and international expertise in the field of interconnection and Pricing
methods.

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Free Trade Agreement (FTA)
The Government of Sultanate of Oman decided to enter into Free Trade Agreement
(FTA) with the United States of America. Negotiation lasted about one year. The
agreement was finalized and awaited for formal legislative approval. TRA fully
participated in the process and contributed to various areas such as market access to
goods, cross border services, intellectual property rights etc. However, the most
important for TRA was Chapter 13 which deals with telecommunications. Eng.
Naashiah Al-Kharusi, Member of Temporary Committee of TRA led the
telecommunications and ICT Group. This field is most flourishing for economic
activities and both sides negotiated on each and every aspect. Therefore, it took
considerable time and several rounds of discussions were held before agreement was
finalized. TRA did it best to protect safeguards and interest of the state and
telecommunication business. However, it must be pointed out that the starting point
of these negotiations was the Sultanate of Oman commitments to WTO. Thus
protection could not be given to those concerned which were already conceded under
WTO agreement.
Arab Centre of Excellence (CoE)
The Centers of Excellence concept was established in order to develop and
strengthen the capability to generate the expertise in developing countries around
the world.
The Arab Center of Excellence is playing unique role in the development of attractive
telecommunication markets and the rendering of telecommunication services for the
development of society in Arab Region by:
1- Developing and strengthening the capability to generate advanced level policy,
regulatory, managerial and requirement of technical expertise to address the needs
of the telecommunication sector in Arab States Region
2- Introducing and enhancement of application of communication and information
technology in education, commerce and other fields of importance in the Region.

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The Center is an ITU project run by a Steering Committee representing the
stakeholders in the Region.
The Steering Committee decided to transfer the office of the CoE from Damascus to
Oman. TRA is hosting the office of the CoE for coming 3 years and providing all the
logistic and man power support to facilitate the activities of the Center besides a
contribution of RO 23130 per annum. CoE office is located at Telecommunication
Regulatory Authority’s premises.

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Liberalization of telecommunications is an on going process and it has embarked TRA
to come up with an ambitious drive to fulfill its objectives stipulated in Telecom Act
2002. In order to accomplish its goals, TRA has prepared a strategic plan and is in
the process of implementing through its staff, by developing legal framework and
procedures, ensuring transparency in its decision making and following customer care
strategies.
TRA has planned following priorities to achieve its objectives
Competition
One of the major responsibilities of TRA is to foster competition in all areas of
telecommunications. Competition is best guarantee of other key objectives such as
the improvement of services and facilitation of a wider choice. A competitive market
cannot be created without the need for regulatory intervention to ensure that
resources are allocated appropriately and fairly. During the period under review
competition was promoted in mobile sector and its fruits are reaching to the end
users. TRA intend to introduce competition in fixed line as well as in value added
services sectors in near future.
USO
Currently teledensity in rural areas is very low due to difficult terrain of the country.
It is the prime concern of the Government and the TRA to ensure access of basic
telecommunication services to all the citizens at affordable prices. Due to unattractive
market in rural areas for the operators from return on investment point of view, it is
challenge for regulator. The Authority intends to address this issue on top priority
through a program in coming year by identifying and formulating the basic
requirements for telecom services in the Sultanate, whereby the Government can
ensure Universal Access in rural and remote areas for such services.
10. Forward-Looking Activities for 2006

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Radio Spectrum
TRA is well aware of future needs of the radio spectrum, therefore the department of
Frequency Planning and Allocation has planned to vacate the 1800 MHz and 2 GHz
bands from the concerned government bodies and make it available to new operators
or licensees, and also intends to vacate the 450-470 bands to make it available for
mobile services for rural areas and other frequency bands which are important for
safety and for the use of aeronautical and maritime services. As for Radio Local Area
Network (R LANs) operating in 2.4 and 5.8 MHZ, the regulations in this regard have
been prepared and awaited for approval. TRA intends to complete all technical data
and to implement Phase II and III of monitoring network system.
Voice over Internet Protocol (VoIP)
VoIP is growing at twice the rate of traditional switched voice and now accounts
globally for 11 percent of international calls. The impact of VoIP technology is
greatest on routes into developing markets, where continuing high international
settlement costs make VoIP an attractive alternative. VoIP will be an area of high
priority for TRA and developing and articulating a longer term view of VoIP and
increased liberalization in light of global developments.
Broadband
Broadband penetration in the Sultanate is very low as compared to regional
countries. The main reasons for low penetration include lack of competition, high
prices and lack of awareness of general public. TRA recognizes the importance of
broadband proliferation in the country since it is directly associated with the social
and economic uplift of the country. TRA is devising strategy to introduce competition
in the broadband resulting reduction in prices and making measures to ease
broadband delivery mechanism and users equipment facilitations.

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