The Sultanate of Oman is no stranger to continuous development and improvement as an independent country. In 2010, the United Nations Development Programme (UNDP) ranked Oman as the most-improved country in the world in terms of development during the preceding four decades. Known for its economic prowess in tourism, maritime trading and other agricultural exports, the World Bank has categorized Oman as a high-income economy, and as of 2023, Oman has been ranked as the 48th most peaceful country in the world, according to the Global Peace Index.
Unsurprisingly, Oman has readily embraced the technological advancement of the 21st century as a natural progression into modernity. Oman has established itself as one of the most progressive telecom sectors in the region in terms of liberalization and promotion of competition in recent years.
Also Read: Omantel Surges Forward: A Recap of 2023's Successes
In April 2016, the Telecommunications Regulatory Authority of the Sultanate of Oman (TRA) issued the Access and Interconnection Regulation (A&I). This decree states that the Omani market must be open to additional telecommunication licensees and resellers on the basis that its purpose is to develop investment within the sector. It encourages the creation of sustainable competition in the industry. Under this regulation, all telecommunication companies providing their services to the public in the Sultanate should provide A&I to physical infrastructure and other facilities upon requests from interested parties. A total of 4 key mobile network operators cater to a population of approximately four million. The leading companies in the telecommunications services market in Oman are Omantel, Vodafone Oman, Ooredoo Oman and Awasr.
Oman has made notable strides in diversifying its economy away from reliance on hydrocarbons toward non-oil sectors, largely driven by a competitive and efficient telecom market. Despite this progress, there remains ample opportunity for further advancement, prompting Oman to actively harness technology to realize its national goal of economic diversification.
Oman recorded real GDP growth of 4.3% in 2022—the strongest since 2016—mainly driven by the hydrocarbon sector which expanded by 10.2%, totaling just over a third of the GDP, according to market analysis reports. Oil GDP grew by 11.0%, similar to the double-digit gains seen elsewhere in the GCC, while natural gas expanded by 5.9%. In contrast, the non-oil sector in 2022 grew by only 1.6%.
Oman’s Economic Direction
Oman Vision 2040 focuses on reshaping the workings and relations between the public, private and civil sectors to ensure effective economic management; achieve a developed, diversified and sustainable national economy; ensure fair distribution of development gains among governorates; and protect the nation’s natural resources and unique environment.
The primary national priorities encompass economic diversification and fiscal sustainability, aiming to cultivate a diversified, sustainable, and competitive economy grounded in knowledge and innovation. Oman’s private sector plays a critical role in driving a competitive economy that is integrated with the world economy through investment and international cooperation. As such, building a future-ready ICT ecosystem that empowers businesses and fosters talent development in the digital sector is at its core, as demonstrated by the Sultanate’s commitment to fostering innovation and collaboration with international organizations, industry leaders, partners and customers.
Also Read: Vodafone Oman: Future-Ready Networks, AI-Powered Security
Oman’s Technology Ecosystem
The evolution of a robust technology ecosystem is vital for a nation to capitalize on technological innovation, fostering the emergence of high-growth industries and job opportunities. As such, Oman’s technology startup ecosystem development is essential to increase the growth of technology and the digital ecosystem to ignite and sustain digital economic growth. The country has seen some homegrown companies emerge in domestic manufacturing and the exporting of ICT services and products, including computers and phones. The Oman ICT market size is estimated to be worth USD 5.47 billion in 2024 and is expected to reach USD 9.07 billion by 2029, growing at a CAGR of 8.88% during the forecast period (2024-2029).
Driven by the vision outlined in Oman Vision 2040 and the ambition to generate local employment opportunities, these companies provide competitive pricing for hardware, effectively competing with international counterparts. In recent years, more SMEs have been seeking opportunities to digitalize their operations and products to appeal to younger consumers and expand their market across the country.
The Ministry of Transport, Communications and Information (MTCIT) of Oman has formulated a digital economy strategy aimed at bolstering the ICT sector's role in the national economy, aligning with the goal of economic diversification. However, to realize the vision of a digital economy in Oman, it is imperative for the country to integrate the necessary enablers of the digital innovation ecosystem across all existing and future strategies effectively.
Navigating Regulatory Complexities
Without reforms, proper policies and regulations in place, attracting foreign direct investments (FDIs)—a key target in Oman’s national digitalization programme—is hard to come by. Having said that, Oman’s ICT policies are well developed, covering areas such as cloud governance, information security, cybercrime, ICT services and access, government open data, database security, and social media.
However, with fast-changing technology, regulatory frameworks that guide the use of new technologies are yet to fully mature in Oman, and as a result, innovation in the use or creation of advanced high-tech (big data, drones, etc.) is still lagging in more ways than one.
Moreover, the application of various advanced technologies often necessitates government approvals, a process that can be time-consuming. Oman scored 85.33 (out of 100) on the ITU ICT Regulatory Tracker2, indicating good regulatory authority and competition frameworks for ICT and telecommunications. The policies necessitate adjustments to accommodate the complexities associated with advanced technologies, such as drones and cloud services, while also clarifying ambiguous areas concerning their access and utilization.
In April, the TRA issued a resolution aimed at efficiently managing natural and national resources. This resolution amended certain provisions of registration regulations and the use of radio frequencies and devices, while also determining their prices. The goal is to foster a flexible regulatory environment that can adapt to developments, facilitating investment in innovative technologies and services.
Moving with the Times
Oman, mainly through MTCIT, has pursued several technology-focused strategies such as the Digital Oman Strategy or e-Oman (2003), the National e-Commerce Strategy, the National Broadband Strategy, the National ICT Strategy, the 4IR, the National Postal Strategy, the Industrial Strategy 2040, as well as the National Strategy for Research and Development 2040. All these strategies were revamped and compiled into a single National Programme for Digital Economy. Despite a certain degree of awareness in the ecosystem regarding these governing documents, there is a need for strong operationalization and timely allocation of funds for implementation.
According to the ITU, technology companies in Oman have the opportunity to collaborate with universities on two fronts. Firstly, SMEs and high-tech companies can leverage domestic opportunities through research and development (R&D).
Secondly, technology companies can access a vast pool of local talent and train them to build the future workforce. For example, in 2023, Omantel and the Sultan Qaboos University forged a five-year partnership aimed at advancing scientific research in Oman. This collaboration focuses on Information and Communication Technology (ICT) and artificial intelligence (AI), with the launch of the "Applied Research Fund." This initiative is tailored to offer support to faculty members and researchers engaged in ICT and AI endeavors, illustrating a concerted effort to foster innovation and development in these critical fields.
This development will empower researchers to collect and analyze data using the latest technical tools, as well as adopt technological innovations in the fields of medicine, agriculture, environment, technology, engineering and other emerging technologies; in line with the government’s policy of supporting scientific research and innovation, aligning with Oman Vision 2040.
Under the agreement, Omantel will provide comprehensive support by involving its pertinent departments. This includes leveraging the expertise of its technology, strategy, and innovation departments to address relevant issues and internal challenges. Collaborating closely with internal teams, these departments will ensure consensus on the final topics shortlisted by the University. Moreover, they will undertake the evaluation and selection of final projects, make recommendations, and allocate advisors for each research project, thereby facilitating a seamless execution of the partnership's objectives.
Furthermore, Omantel Innovation Labs will offer assistance by granting access to Omantel's incubators and accelerator programs, along with facilitating connections with the company's experts. Over the span of five years, this support will culminate in the production of nearly 30 scientific papers, enriching the collaborative efforts between Omantel and Sultan Qaboos University in advancing research in ICT and AI.
In a recent development, the UAE and Oman signed a partnership agreement, outlining the development of technological infrastructure between the two countries. ADQ, an Abu Dhabi-based investment and holding company and the Oman Investment Authority (OIA) announced the launch of a USD 180 million technology-focused fund—Jasoor Fund—as part of a broader framework agreement signed between both parties in 2022. The fund aims to bolster the digital economy in Oman and the wider MENA region by supporting high-growth technology companies in sectors such as FinTech, EdTech, HealthTech, cleantech, food and agriculture, and logistics. The fund’s core focus will be on Oman’s innovative technology companies, in addition to technology startups in other countries in the region. It will undertake investments in high-growth technology companies at various stages of development that have established business models.
Moreover, the Oman Information and Technology Society aspires to coordinate and unify the efforts of all ICT stakeholders and nurture a culture of collaboration. Moreover, it aims to support the spread of ICTs throughout civil society through events, training, private consultations and awareness campaigns.
Similarly, leading Oman operators, Vodafone Oman and Ooredoo Oman, have significantly enhanced their 5G network expansion strategy, intending to provide quality connectivity experiences to the citizens of Oman, including the establishment of new global data centers.
Also Read: Ooredoo Oman to Land World’s Largest Subsea Cable System
Oman Government’s Infrastructure Investments
Oman’s Telecommunications Regulatory Authority (TRA) has focused on enhancing the quality of internet services with several initiatives for 2024. The plan includes the deployment of 5G sites and the comprehensive transition from low-speed ADSL service to fiber-based home internet, ensuring enhanced connectivity and internet access for users. This has paved the way for quality, consistency and, possibly, more technological innovation, such as in the fields of IoT and AI, among others.
Oman boasts around 21 submarine cable systems, which facilitate fiber optic connections to Asia and Europe. Oman Broadband is collaborating with an integrated ICT company in Saudi Arabia to develop the infrastructure for building fiber optic networks to enhance international connectivity between Oman and Saudi Arabia, enabling operators to achieve mutual strategic benefits. Through the cooperation, the two companies will also focus on improving their products and services to meet market and regulatory requirements.
The rollout of fifth-generation (5G) mobile connectivity has yielded positive success in a market with stable 3G and 4G coverage. The TRA has outlined plans to allocate spectrum frequencies to telecom operators, aiming to ensure superior Quality of Services (QoS). Additionally, there is a strategic initiative to phase out 3G services gradually, placing emphasis on bolstering 4G networks and advancing towards 5G and eventually 5G-Advanced technologies.
Furthermore, Oman recently launched Oman-IX, a neutral internet exchange that aims to revolutionize the digital infrastructure services in the region, connecting leading telecom industry networks providers, hyperscalers, data centers, and cloud services across the Middle East and beyond. Powered by AMS-IX, an internet exchange point based in Amsterdam, the Oman-IX has been deployed at Equinix's neutral carrier data center in Muscat, marking a significant milestone in Oman's digital transformation.
Leveraging satellite communication for seamless connectivity, Oman has witnessed significant development in the space sector. The first Omani satellite, Aman-1, was launched in November, following a failed attempt. NASCOM announced plans to build the first spaceport in the MENA region in Al Duqum. Moreover, the Global Space and Technology Company unveiled the creation of Zone 88, a scientific and economic area dedicated to space sciences and industries. In addition, ETCO Space announced plans to launch a joint venture project to manufacture satellites in Oman. Interestingly, Starlink Muscat has also been licensed to establish and operate a satellite communications system to provide public communications services.
Embracing AI’s Potential
Over the past five years, the field of artificial intelligence (AI) has witnessed significant advancements across its various sub-domains. Progress has been notable in multi-agent systems, which comprise computerized systems with multiple interacting intelligent agents. Additionally, strides have been made in areas such as speech recognition and generation, natural language processing encompassing understanding and generation, as well as image and video generation. Moreover, developments have extended to decision-making processes and the integration of vision and motor control for robotics, reflecting a comprehensive evolution within the AI landscape.
AI applications have come to encompass various domains such as health, games, FinTech, autonomous driving, interactive personal assistance and so on. Developing a national program to implement and incorporate artificial intelligence technologies has been at the core of Oman's determination to make the digital economy a priority and a cornerstone of the national economy.
Taking current industry trends into consideration, the use of AI technology will be pervasive across industry sectors around the globe and Oman is no exception. The national agenda, outlined in the tenth five-year plan, prioritizes the creation of future-ready industries, bolstering in-country value (ICV), fostering youth employment, supporting enterprises, and attracting essential Foreign Direct Investment (FDI) into the digital economy. The realization of these objectives hinges significantly on the nation's ability to harness the potential of artificial intelligence.
The AI technologies market is expanding, amounting to around USD 200 billion in 2023, and is expected to grow beyond USD 1.8 trillion by 2030. To increase the ICV, Oman aims to introduce the latest technologies and innovations in AI technology to both the government and private sectors through various national projects. Oman’s Ministry of Economy has approved the development budget allocated for AI projects for 2025, amounting to OMR 15 million, out of which OMR 10 million is allocated for government agencies and OMR 5 million for the governorates.
Some of the projects aligned with the AI initiative include:
- Smart Management project for the Ministry of Labour
- Smart Electronic Portals project for Dhofar Municipality
- Environmental Information Bank with Artificial Intelligence and Blockchain Technology project for the Environment Authority
- Supporting Promising Omani Startups in AI Applications and Technologies
- National Center for Virtual Health project for the Ministry of Health
- Ayn platform for the Ministry of Information
- Linguistic Model for Omani Content and Artificial Intelligence Studio projects for the MTCIT
While Oman has experienced significant international investments, primarily within its economic free zones, where global companies can establish operations enjoying benefits such as full ownership and tax exemptions on imports and exports, Foreign Direct Investment (FDI) in the ICT ecosystem has remained relatively low, with the exception of the UK Oman Digital Hub. Currently, the MTCIT is examining the possibility of attracting more FDI to the ICT sector.
Industry experts advocate for Oman to transform into a genuine digital innovation hub by directing its research and development efforts towards harnessing AI. This entails providing sufficient financial incentives and research facilities to innovators, empowering them to extend their research from laboratories to accessible solutions for end-users across public and private sector verticals.
Additionally, there is a pressing need for a formal ICT network to advocate for the interests of Oman's digital innovation ecosystem. Associations such as the Oman Chamber of Commerce, the Oman Information Technology Society and the Oman Education Technology Society are recognized as potential bodies that may lead towards such an ecosystem.
Attend Virtual Panel: Unveiling Oman’s Digital Revolution – Don’t Miss Out, Register Now!
