ALKHOBAR: Yesterday afternoon, through its public relations agency, Oman’s Ministry of Finance sent out a press release on the results of the pre-qualification process with regards to the sale of a 25 percent stake in Omantel to a potential strategic partner. The press release stated:
“The ministry’s advisers have expressed a high degree of satisfaction with the outcome of the pre-qualification process which has evoked serious and strong interest from highly credible and reputed international and regional, telecom operators.
“Following an in-depth evaluation of the submissions of expressions of interest, the Ministry of Finance has confirmed that eight telecom operators have been selected to participate in the next phase of the sale process. The ministry, together with its advisers, is now in contact with the qualifying telecom operators that will be invited to submit first round technical and financial proposals for a 25 percent stake in Omantel. This includes prominent European, Asian and regional telecom operators.
“Darwish Ismail Al-Bulushi, secretary-general of the Ministry of Finance and chairman of the Steering Committee overseeing the Omantel strategic partnership process said: ‘The quality and number of expressions of interest received were very strong. The level of interest is testament to the quality of the Omani macroeconomic scene, the opportunity in the Omani telecoms market and of Omantel itself. The selected parties are being contacted and we now look forward to receiving the parties’ first round proposals in the second half of September.’”
For further information on the sale process, journalists were directed to a dedicated website — www.mof-omantel.com — set up by Oman’s Ministry of Finance specifically for the Omantel partial sale.
There was one immediate question that came to mind after reading the press release. Who are the eight telecom operators that have been selected to participate in the next phase of the partial sale process? A visit to the suggested website gave absolutely no information in this regard. There was a legal notice posted there however, which stated:
“This website has been prepared by or on behalf of the Government of the Sultanate of Oman (the GSO), acting through the Ministry of Finance (the MOF), in connection with the proposed partial sale of the GSO’s stake in Oman Telecommunications Co. (Omantel) to a strategic partner (the partial sale). The MOF is not obliged to update or revise any information on this website, including any forward-looking statements, whether as a result of new information, future events or otherwise or to correct any inaccuracies which come to the attention of the GSO, the MOF, or their respective advisers.”
In other words, while this website was established to inform the public internationally about the Omantel partial sale, don’t expect that it will be informative at all. With the website lacking, it was time to turn to the public relations firm involved, Capital MS&L Middle East, located in Dubai. The Capital MS&L representative did her best to be helpful and politely confirmed the lack of transparency in the news release.
“We did advise the advisers in the Omantel partial sale to release the names of the eight telecom operators that have been selected to participate in the next phase of the sale process, but they have chosen not to do that,” the PR representative explained over the phone. “From previous media reports I do know that Saudi Telecom and Emirates Telecommunications Corporation have expressed an interest to participate. I will pass your comments on to the Omantel advisers but that’s the best I can do.”
A report from Reuters an hour later added that Qatar Telecommunications Company has also expressed interest in the stake. The report went on to explain that there would now be a shortlist of four or five bidders, who will propose how much they will pay for the 25 percent stake. This will happen a month or two from now. The winning partner would get voting rights in Omantel.
Oman had extended the deadline for expressions of interest to Aug. 15 from July 18. Citigroup Global Markets Limited and National Bank of Oman are advising the government on the sale, which the official said should be concluded by December. Rumors that the government could seek three rials ($7.80) a share for the Omantel stake have driven the telecom stock up more than 8 percent since Aug. 11. In Oman, home to 2.5 million people, mobile phone penetration of 96 percent is the lowest in the Gulf region, where the total often exceeds 100 percent because people frequently own more than one phone.
All of this is good information but it still doesn’t answer the key question: “Who are the eight telecom operators that have been selected to participate in the next phase of the Omantel partial sale process?”
It is certain that those eight companies are publicly held firms. Their shareholders would certainly be interested to know that the companies had been selected to participate in the next phase of the partial sale process. It would be even more interesting to know which of the original eight are selected for the shortlist of four or five. High-level industry insiders most certainly know the eight firms that pre-qualified. It is the public who doesn’t know and that shouldn’t be acceptable any more.
Lack of transparency in business is a major concern in the GCC. In its annual Corruption Perception Index (CPI) for 2007, the organization Transparency International awarded Oman a 4.7 score, ranking it 53rd out of 179. Qatar did the best in the GCC, earning a CPI score of six, followed by the UAE with 5.7, Bahrain at 5 and then Kuwait at 4.3 and Saudi Arabia at 3.4. Globally, Denmark, Finland and New Zealand topped the CPI, all with scores of 9.4.
Only Oman’s Ministry of Finance knows why the decision was made to withhold the names of the eight companies that may be invited to submit first round technical and financial proposals and they may have a good reason to do so, but they haven’t chosen to reveal that either. But there are potentially negative consequences of concealing business information. Stock markets across the GCC continue to struggle due to concerns about speculation. Insider trading has also been the subject of intense debate and limited action on the part of regulators. Every GCC nation has been attempting to raise the rates of foreign direct investment (FDI), however it has been a challenge since investors consider a country’s laws and reputation as well as its prospects. Without a doubt, there is still an enormous need for investment in technology infrastructure and resources across the GCC. But will that investment come from the private sector regionally and globally or will GCC governments be forced to allocate limited capital to offer their populations the opportunities available on the First World side of the digital divide?
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