Omantel board recommends 70% cash dividend
Omantel’s board of directors has proposed distributing a cash dividend to the extent of 70 per cent of the company’s paid up share capital which is equal to 70bz per share.
This is in addition to the interim dividend of 40bz per share distributed in August 2016. Accordingly, the total cash dividend for 2016 amounts to 110bz per share or 110 per cent of the company’s paid up share capital.
The board also proposed to Omantel’s annual general meeting (AGM) to authorise it to distribute an interim dividend in August 2017 to the extent of 30 per cent of the paid up share capital. Omantel AGM is to be held on March 30.
Omantel reported a group net profit of RO116.7mn for the year ended December 31, 2016, while group revenue for 2016 increased by 3.2 per cent to RO523.6mn from RO507.3mn in the previous year.
Omantel said the growth in revenue was mainly driven by broadband revenues which rose by 11 per cent and wholesale revenues by 19 per cent. ‘Conventional revenue streams such as voices and SMS have continued its declining trend due to over-the-top (OTT) services’, Omantel said in its yearly financial report submitted to Muscat Securities Market on Sunday.
Oman’s telecom market in 2017 will see the impact of several regulatory changes and stiff competition which will likely pose challenges for growth opportunities and operators’ capability to maintain current levels of investment and profitability, Omantel said.
Recently, the Telecom Regulatory Authority (TRA) formally reverted the royalty percentage rate paid by telecom operators from seven per cent to its previous rate of 12 per cent on gross revenue. ‘This is in addition to an increase in corporate taxation from 12 per cent to 15 per cent. This is expected to have a
negative impact on Omantel’s net profitability in 2017’, Omantel said.
The company said the launch of a third licensed mobile operator can become a reality, as the TRA invited bids for a third class-1 license in November last year. It said, ‘Omantel and all the existing operators are expected to get significantly impacted by the hyper competition, coupled with the newly imposed access & interconnection (A&I) regulations going forward’.
Omantel expects that the effects of low oil prices and economic environment will continue to affect consumer and enterprise spending behaviour. At the same time, it said, the OTT players in the domains of voice, messaging and content are further putting pressure on the traditional markets in telecom sector.
‘These market dynamics will likely pose challenges for the growth opportunities as well as the capability of operators to maintain their current levels of investment and profitability’, Omantel said.
Omantel’s mobile network market share [including mobile resellers] is estimated at 58.4 per cent with a revenue share of 59.1 per cent. The company estimates its fixed telephone (post and pre-paid) market share at 73.7 per cent with a revenue market share of 82.4 per cent.