Zain and Omantel form international wholesale JV

Kuwait-based Zain and Omantel want to compete with the UAE as a regional telecoms and IT powerhouse.

The two operators on Sunday announced they will form a new joint venture called Zain Omantel International (ZOI), which will offer a range of wholesale services aimed at both regional and international telcos, as well as cloud and content providers.

The venture will manage Zain and Omantel’s respective wholesale businesses, making them more efficient as well as competitive. It will be led by Sohail Qadir, who is currently vice president of wholesale at Omantel, where he has overseen a tenfold increase in revenue, and investments in no fewer than 20 subsea cables.

ZOI aims to establish itself as a hub for the flow of comms traffic into and out of the region, and offer better connectivity across Zain’s operating footprint, which, in addition to its home market of Kuwait, also includes Bahrain, Iraq, Jordan, Morocco, Saudi Arabia, and South Sudan.

To help with that, ZOI will participate in the development of the Blue-Raman, Africa-1, and the Jeddah to Marseille (J2M) submarine cable systems, as well as an extensive terrestrial network connecting most countries in the region to landing stations and data centres.

“ZOI is ideally positioned to evolve into a significant international player on the wholesale telecommunications scene that will benefit both Zain and Omantel on financial, commercial and operational levels,” said Zain CEO Bader Al-Kharafi, in a statement.

“ZOI is poised to become the primary gateway from our region to the rest of the world, leveraging the combined strengths of Omantel and Zain,” added Omantel CEO Talal Al Mamari. “With these differentiating factors, ZOI is the preferred partner with a truly unique presence in the international telecommunications landscape.”

With IDC predicting that telecoms and IT service spending in the Middle East, Turkey and Africa will grow by 3.9% this year to reach $233.8 billion, it is plain to see why Zain and Omantel are keen to capitalise.

ZOI could also potentially help Omantel and Zain attract more business from global hyperscalers.

Oman boasts no fewer than seven cable landing stations, while Kuwait has one. It means that between them, these two markets have more landing stations than Saudi Arabia, and more than Bahrain, Qatar and the UAE combined.

Despite this, Bahrain, Qatar, Saudi Arabia and the UAE have tended to be the primary ports of call for the hyperscalers. Amazon Web Services (AWS) launched its latest Middle East region in the UAE last August, joining Microsoft, which has been offering various Azure services from Abu Dhabi and Dubai since the end of 2019. The software giant also has a presence in Saudi Arabia and Qatar. Google Cloud meanwhile operates a region in Qatar, and plans to open another in Dammam, Saudi Arabia.

If ZOI makes good on its strategy of becoming a gateway to the region for both enterprises and telcos, then hyperscalers – keen to ensure that every application and scrap of data on Earth can be hosted in one of their data centres – are highly likely to take note.

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