Oman Telecom Sector: Chart Book

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Leslie Burke
5 years ago
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1 Oman Telecom Sector: Chart Book Research Team 1 Joice Mathew Santhosh Balakrishnan

2 Oman Telecom Sector Update Global Telecom Industry Trends 2

and Data traffic Global operators EBITDA and Capex Source: Ernst and Young.

3 Oman Telecom Sector Update Exhibit: Global Telecom Trends Global Population and Mobile connections Global Smartphone Shipments Global Mobile Data revenue and Data traffic Global operators EBITDA and Capex Source: Ernst and Young. Special attribution to E&Y report on Metrics transformation in telecommunications 3

4 Oman Telecom Sector Update Exhibit: Global divergence in telecom KPI Source: E&Y report 4

5 Vodafone Qatar Zain KSA Hutchinson MTS AT&T Verizon Singtel Belgacom France Telecom Deutsche Telekom Turkcell Bt Group Plc Elisa Bharti Teliasonera Portugal Telecom Telekom Austria Telefonica Vodacom Telekomunikacja Safaricom Swisscom Koninklijke NTT Docomo Telenor Vodafone UK BCE Canada Telecom Italia TDC,Denmark Telstra Chunghwa Telecom MTN China Mobile Maxis Telekomunikasi 11.8% 13.7% 15.6% 20.5% 24.4% 25.6% 27.5% 27.8% 28.4% 30.5% 30.9% 31.4% 32.1% 32.2% 33.4% 33.4% 33.4% 33.6% 33.6% % 34.4% 35.3% 35.6% 36.1% 36.3% 36.5% 36.8% 37.9% 38.1% 38.2% 39.2% 39.2% 39.4% 39.5% 39.5% 39.9% 40.5% 40.5% % 43.5% 43.9% 45.3% 45.8% 49.5% 50.8% 51.5% Hutchinson Bt Group Plc Deutsche Telekom Singtel Verizon AT&T Elisa Belgacom Teliasonera Vodacom France Telecom Telekom Austria Telenor Turkcell NTT Docomo Vodafone UK Portugal Telecom Swisscom Maxis Telefonica Koninklijke Telekomunikacja Bharti TDC,Denmark BCE Canada Telecom Italia MTS Telstra Safaricom MTN Chunghwa Telecom China Mobile Telekomunikasi % 26.8% 29.2% 29.5% 29.7% 30.5% 32.4% 32.9% 33.1% 33.2% 33.4% 33.5% 33.9% % 35.2% 36.2% 36.3% 36.5% 36.8% 37.2% 37.4% 37.7% 37.9% 38.3% 38.4% 38.7% 38.7% 39.6% 39.6% % 41.7% 42.1% 42.1% 42.5% 42.7% 44.3% 46.1% 46.5% 47.6% 47.8% 49.7% 50.8% 55.7% 57.5% Oman Telecom Sector Update Exhibit: Global EBITDA Margin trends EBITDA Margin-5 Yr.Avg EBITDA Margin

6 Vodafone Qatar Zain KSA Deutsche Telekom Telecom Italia Verizon France Telecom Telekom Austria Portugal Telecom Koninklijke AT&T Bharti Telekomunikacja Polska Telefonica MTS Telenor Bt Group Plc Hutchinson NTT Docomo Belgacom Safaricom Elisa Telstra TDC,Denmark BCE Canada Vodafone UK Vodacom MTN Swisscom Telekomunikasi Teliasonera Turkcell Maxis Chunghwa Telecom Singtel China Mobile -39.8% -27.3% % -5.5% 0.8% 1.9% 2.4% 3.5% 5.6% 5.7% % 8.1% 8.7% 9.9% 10.2% 10.4% 10.7% 10.9% 11.1% 11.9% 12.3% 13.4% 13.5% 13.8% 13.8% % 15.3% 15.4% 16.7% % 19.7% 19.8% 19.8% 20.1% 20.4% 20.5% 20.7% 20.9% 21.2% 22.5% 23.1% 25.3% 25.5% Deutsche Telekom Telecom Italia Telekom Austria Verizon Bt Group Plc France Telecom Telekomunikacja AT&T Vodafone UK NTT Docomo TDC,Denmark Hutchinson Telefonica Telenor Elisa BCE Canada Koninklijke Vodacom MTS Swisscom Telstra Belgacom MTN Bharti Telekomunikasi Safaricom Teliasonera Turkcell Maxis Singtel Chunghwa Telecom China Mobile Portugal Telecom % % 7.4% 8.1% 8.6% 9.2% 10.1% 10.8% 11.1% 11.5% 11.7% 12.3% 12.4% 12.5% 12.5% 12.7% 12.9% 13.1% 13.4% % 14.5% 14.5% 14.6% 17.4% 17.5% 17.8% 18.4% 19.4% 19.8% 20.1% 20.6% 22.3% 22.7% 23.4% % 24.8% 26.4% 27.5% 27.8% 27.9% 28.4% 28.6% 33.8% Oman Telecom Sector Update Exhibit: Global Net Margin trends Net.Margins 5 Yr.Avg Net.Margins

7 Zain KSA Deutsche Telekom Vodafone Qatar Telecom Italia Verizon France Telecom Hutchinson Telekomunikacja AT&T Bharti Portugal Telecom Vodafone UK NTT Docomo Chunghwa Telecom Telekom Austria Telenor Telefonica Turkcell TDC,Denmark Singtel Teliasonera Safaricom China Mobile BCE Canada Telekomunikasi Belgacom MTN Elisa Maxis MTS Koninklijke Telstra Swisscom -20.7% -17.2% -13.7% -7.4% -7.1% % % 7.8% 7.9% % 8.9% 9.1% 9.3% 10.9% 11.6% 12.4% 12.4% % 14.6% 14.7% 16.4% 16.7% % 17.7% 17.8% 18.8% 19.2% 20.5% % 22.6% 24.5% 26.3% 26.3% 26.3% 28.1% 28.8% 29.1% 32.4% 42.2% Zain KSA Vodafone Qatar Deutsche Telekom Telecom Italia Telekom Austria Verizon Vodafone UK Hutchinson -31.9% -8.2% -1.1% Telekomunikacja NTT Docomo AT&T Chunghwa Telecom France Telecom Telenor Teliasonera BCE Canada Singtel Turkcell MTN Elisa Bharti China Mobile Telekomunikasi TDC,Denmark Safaricom Maxis Telstra Bt Group Plc Telefonica Swisscom MTS Belgacom Portugal Telecom 1.3% 3.3% 4.6% 5.3% 7.1% 7.3% 8.6% % 10.5% 10.8% 12.1% 12.3% 14.2% 14.8% 15.5% 17.2% 17.7% 18.6% 19.9% 20.4% 20.6% 20.8% 21.2% 21.4% 21.4% 21.6% 22.4% 22.6% 23.1% 24.9% 25.3% 25.5% 26.9% 28.5% 28.9% 29.2% 29.3% % % 40.2% 42.1% Oman Telecom Sector Update Exhibit: Global ROE trends ROE- 5 Yr Avg ROE

8 MTS France Telecom Telekomunikacja Hutchinson AT&T Chunghwa Telecom Telekom Austria TDC,Denmark Belgacom Koninklijke Telefonica Portugal Telecom Verizon Turkcell Swisscom Telecom Italia NTT Docomo Elisa Telstra Telekomunikasi Deutsche Telekom Bt Group Plc Teliasonera BCE Canada Singtel Maxis China Mobile Telenor Vodafone UK Safaricom Vodacom MTN Bharti % -12.2% -8.5% -8.1% -6.6% -5.9% -5.8% -5.1% -4.9% -4.5% -3.9% -3.6% % -1.6% -1.4% -1.2% % -0.4% -0.2% % 0.6% 0.6% 0.9% 0.9% 1.5% 1.9% 2.4% 2.4% 3.8% 3.9% % 5.4% 6.6% 7.9% 9.1% 10.1% 12.4% 15.5% 23.9% 26.3% 28.8% 29.5% TDC,Denmark Telekomunikacja France Telecom Telekom Austria NTT Docomo Deutsche Telekom Telecom Italia Bt Group Plc Elisa Koninklijke Chunghwa Telecom Swisscom Telstra Belgacom AT&T Portugal Telecom Teliasonera Telenor Telefonica Hutchinson BCE Canada Maxis Verizon MTS Turkcell Telekomunikasi Singtel Vodafone UK China Mobile Vodacom MTN Safaricom Bharti -7.9% -5.2% % -3.8% -2.5% -2.4% -1.4% -1.2% -0.9% -0.2% -0.1% 0.1% 0.5% 0.5% 0.5% 0.8% 1.3% 1.4% 1.4% 1.6% 1.7% 1.7% 1.9% % 2.4% 3.1% 4.4% 4.7% % 5.4% 7.4% 8.3% 9.1% 9.4% 10.2% 11.5% 12.8% 13.1% 15.4% 17.7% 22.9% 26.6% 31.1% 45. Oman Telecom Sector Update Exhibit: Global Telco s Sales and EBITDA trends Revenue CAGR EBITDA CAGR

9 Deutsche Telekom Telecom Italia Vodafone Qatar Zain KSA Bharti Telekom Austria Koninklijke Bt Group Plc Hutchinson China Mobile NTT Docomo Telefonica Teliasonera Singtel Swisscom Telekomunikasi Indonesia Safaricom MTN Belgacom Telekomunikacja Polska MTS Telenor Chunghwa Telecom Vodafone UK Elisa Telstra Vodacom TDC,Denmark AT&T Maxis Portugal Telecom France Telecom BCE Canada -57.3% -23.7% % 21.4% 24.9% 33.8% 33.9% 43.2% 48.3% 50.1% 54.4% % 62.1% % 69.1% 69.3% 74.1% 74.2% 75.2% % 83.4% 83.5% % % % 99.3% 102.1% % 141.4% 161.6% 241.7% % Telekom Austria Bt Group Plc Zain KSA Bharti Hutchinson Telecom Italia Safaricom MTN NTT Docomo China Mobile TDC,Denmark Telenor Vodafone UK Teliasonera -31.7% -7.3% Telekomunikasi BCE Canada Koninklijke Singtel Telefonica MTS Swisscom Elisa Belgacom Vodacom France Telecom Chunghwa Telecom AT&T Telstra Portugal Telecom Verizon Telekomunikacja Deutsche Telekom Vodafone Qatar % 11.9% 24.3% % 31.5% 38.6% 39.1% 39.6% 40.7% % 43.9% 46.5% % 53.4% 54.1% 54.9% 55.3% 58.1% 62.9% 64.3% 64.9% 65.6% 71.1% 73.2% 73.9% 75.9% 76.7% 77.2% % 91.9% 98.9% 100.9% 107.8% 114.2% 134.2% 134.7% 144.3% % 499.4% Oman Telecom Sector Update Exhibit: Global Payout ratio trends Payout Ratio-5 YR Avg Payout Ratio

10 Maxis Telecom Italia TDC,Denmark Vodafone UK Hutchinson Deutsche Telekom Belgacom NTT Docomo Elisa Singtel Vodacom Koninklijke Turkcell Telstra Telefonica France Telecom Bt Group Plc Chunghwa Telecom Teliasonera AT&T Telenor Verizon Telekom Austria Telekomunikacja BCE Canada Swisscom MTS MTN Portugal Telecom Telekomunikasi China Mobile Safaricom Bharti 8.4% 9.7% % % 11.4% 11.9% 12.3% 12.3% 12.4% 12.4% % % 14.2% 14.4% 14.6% 15.2% 15.2% 15.6% % 16.5% 16.9% 17.4% % 18.7% 18.9% 19.2% 19.8% 21.4% 22.3% 22.4% 22.9% 24.9% 25.1% 25.4% 25.5% 29.5% % Deutsche Telekom Vodafone UK Telecom Italia France Telecom Verizon Telekom Austria Koninklijke Portugal Telecom % % % % % Telekomunikacja TDC,Denmark Telefonica MTS Telenor AT&T BCE Canada Bt Group Plc Belgacom Chunghwa Telecom Swisscom Hutchinson Maxis Elisa Telekomunikasi NTT Docomo Telstra Bharti Singtel Safaricom Teliasonera Turkcell China Mobile Vodacom MTN -33.5% -30.8% -26.8% -23.6% -20.9% -17.8% -15.6% -15.1% -13.6% % -9.6% -9.5% -7.4% -6.8% -5.8% -4.7% -3.7% -3.5% -3.2% -3.1% -2.5% -1.6% -1.3% -1.3% % 0.7% 0.9% % 1.2% 1.9% 2.4% 3.4% 8.2% 9.9% 11.9% 14.3% 34.3% 35.2% Oman Telecom Sector Update Exhibit: Global Telco s Net Income and Capex/ Sales trends NetIncome CAGR % 3 25% 2 15% 1 5% Capex/Sales-5 Yr Avg 10

11 Oman Telecom Sector Update MENA Telecom Industry Trends 11

12 11.1% 12.3% % 10.2% 19.4% 20.6% 12.3% 22.3% 22.7% 23.4% 26.4% 27.5% 27.9% 27.8% 28.4% 28.6% 19.1% 19.7% 19.8% 20.1% 20.4% 20.5% 22.5% 25.3% 25.5% % 36.5% 37.2% 37.7% % 42.1% 44.3% 46.1% 46.5% 47.6% 49.7% 31.4% 33.4% 57.5% 34.1% 36.3% 37.9% 38.1% 38.2% 39.4% 40.5% 43.5% 43.9% 45.3% 50.8% 53.2% Oman Telecom Sector Update Exhibit: MENA EBITDA Margin trends EBITDA Margin-5 Yr.Avg EBITDA Margin-2012 Net.Margins 5 Yr.Avg 4 Net.Margins

13 -217% -166% Zain KSA Vodafone Qatar 4% 8% 9% 9% % -4% -3% -2% -1% 12% 12% 13% 15% 1% 2% 17% 17% 12% 18% 19% 34% 35% 2 21% 21% 22% % Vodafone Qatar Zain KSA 8% 11% 13% 15% 17% 19% 2 21% 22% 23% 25% 25% 25% 31% -5.9% -5.1% -3.9% -1.8% -0.4% 56% % 3.8% 3.9% 15.5% 23.9% 28.8% 29.5% 115% Exhibit: MENA Telco s Capex/Sales and EBITDA and Bottom-line trends Oman Telecom Sector Update EBITDA CAGR Capex/Sales-5 Yr Avg Net Income CAGR % 2 Capex/Sales % % 13

14 -13.7% % % 11.6% 12.4% 48.3% 14.6% 14.7% 54.4% % % 66.9% 26.3% 69.3% 28.8% 74.2% 32.4% 82.1% 83.4% 83.5% % % 7.3% 8.6% 12% 10.2% 24% 3 31% 32% 17.7% 18.6% 20.4% 20.8% 51% 21.4% 55% 55% 23.1% 24.9% 64% 65% 25.5% 26.9% 71% 32.5% 99% 101% 40.2% 134% Oman Telecom Sector Update Exhibit: MENA ROE and Payout ratio trends ROE- 5 Yr Avg Payout Ratio-5 YR Avg ROE Payout Ratio

15 Oman Telecom Sector Update Exhibit: MENA Wireless Subscribers Trends 2.5 Bahrain 6.0 Kuwait 6.0 Oman Qatar Saudi Arabia UAE (Subscribers in Mn) 15

16 Oman Telecom Sector Update Oman Telecom Industry Trends 16

17 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Exhibit: Industry SMS,MMS and Voice traffic trends with MOU and RPM data Oman Telecom Sector Update RPM (RO) RPM (RO) 17

18 Oman Telecom Sector Update Exhibit: Capex trends across the industry (Mobile and Fixed) 18

19 Oman Telecom Sector Update Oman Telecommunications SAOG () 19

20 Oman Telecom Sector Update Exhibit: Price Multiples Trends-yearly I 20

21 Oman Telecom Sector Update Exhibit: Price Multiples Trends-yearly II 21

22 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Oman Telecom Sector Update Exhibit: Subscribers across all segments Post Paid Subscribers 8% 7% 6% 5% 4% 3% 2% 1% -1% -2% -3% 2,700 2,200 1,700 1, Pre- Paid Subscribers 8% 6% 4% 2% -2% -4% 2,700 2,200 1,700 1, Total Wireless Subscribers 7% 6% 5% 4% 3% 2% 1% -1% -2% -3% -4% Post Paid Subs ('000) Prepaid Subs ('000) Total wireless Subs ('000) Mobile Resellers Fixed Internet Subscribers 14% 12% 1 8% 6% 4% 2% -2% 3,500 3,000 2,500 2,000 1,500 1, Total Subscribers 8% 6% 4% 2% -2% -4% Mobile Resellers-Otel Subs ('000) QoQ Fixed Internet Subs QoQ Total Mobile Subscribers (With MR) 22

23 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Oman Telecom Sector Update Exhibit: Subscribers and Mobile ARPU Trends QoQ WorldCall Subscribers Fixed Line Subscirbers 3% 2% 1% -1% -2% -3% -4% -5% -6% -7% Mobile broadband Subscribers 35% 3 25% 2 15% 1 5% Worldcall Subs ('000) Blended Mobile ARPU 15% 1 5% -5% -1-15% Fixed Line Subs ('000) QoQ 45 Postpaid Mobile ARPU Mobile broadband Subs ('000) 9.0 Pre-paid Mobile ARPU QoQ 4% 2% -2% -4% -6% -8% -1-12% -14% Blended ARPU (RO) QoQ Post-Paid Mobile ARPU (RO) QoQ Prepaid ARPU (RO) QoQ 23

24 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Oman Telecom Sector Update Exhibit: Financial trends QoQ Group Revenue 15% 1 5% -5% -1-15% Fixed segment revenue Mobile segment revenue 1 5% -5% -1 mobile RO Mn QoQ Revenue (Group)-RO Mn Whole Sale Revenue Fixed RO Mn QoQ EBITDA Adj.Royalty 25% 2 15% 1 5% -5% -1-15% Net Income Wholesale revenuero Mn QoQ EBITDA-Adj.Royalty RO Mn QoQ Net Income RO Mn QoQ 24

25 Oman Telecom Sector Update Exhibit: Price Multiples Trends-QoQ I 25

26 Oman Telecom Sector Update Exhibit: Price Multiples Trends-QoQ II 26

27 Exhibit: EV/EBITDA trends vs MSM30 vs MSM Services Index Oman Telecom Sector Update 27

28 Exhibit: EV/EBITDA trends vs MSM30 vs MSM Services Index..II Oman Telecom Sector Update 28

29 Oman Telecom Sector Update Exhibit: PER trends vs MSM30 vs MSM Services Index 29

30 Oman Telecom Sector Update Exhibit: PER trends vs MSM30 vs MSM Services Index..II 30

31 Oman Telecom Sector Update Exhibit: Price/Book trends vs MSM30 vs MSM Services Index 31

32 Exhibit: Price/Book trends vs MSM30 vs MSM Services Index II Oman Telecom Sector Update 32

BVPS Yield Oman Telecom Sector Update Exhibit: Price Sensitivity Sensitivityto Price on 1% change in 2013-15E EBITDA and 0.1x change in EV/EBITDA 0.00 201 203 205 207 209 211 213 215 218 4.2x 1.277 1.

33 BVPS Yield Oman Telecom Sector Update Exhibit: Price Sensitivity Sensitivityto Price on 1% change in E EBITDA and 0.1x change in EV/EBITDA x x x x x x x Current Price/Book trading range Dividend Yield Sensitivity to Price Dividend Per share (range) 6% % % % %

34 Oman Telecom Sector Update Omani Qatari Telecommunications Co. () 34

35 Oman Telecom Sector Update Exhibit: Price Multiples Trends-QoQ I 35

36 Oman Telecom Sector Update Exhibit: Price Multiples Trends-QoQ II 36

37 Oman Telecom Sector Update Exhibit: EV/EBITDA trends vs MSM30 vs MSM Services Index 37

38 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 Oman Telecom Sector Update Exhibit: PER trends vs MSM30 vs MSM Services Index NWRS Vs MSM 30 vs MSM Services PER NWRS vs MSM Services PER NWRS MSM 30 Index MSM Services NWRS PER - Avg MSM PER Avg MSM-Ind PER-Avg NWRS MSM Services NWRS PER - Avg MSM-Ind PER-Avg 13 PER Expansion chart 16 NWRS vs MSM 30 PER NWRS MSM 30 Index MSM Services NWRS MSM 30 Index NWRS PER - Avg MSM PER Avg 38

39 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 1-Jan-11 1-Mar-11 1-May-11 1-Jul-11 1-Sep-11 1-Nov-11 1-Jan-12 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 Oman Telecom Sector Update Exhibit: Price/Book trends vs MSM30 vs MSM Services Index NWRS Vs MSM 30 vs MSM Services Price/Book NWRS vs MSM Services price/book NWRS MSM Services MSM Price/Book Avg MSM 30 Index NWRS Price/Book - Avg MSM-Ind Price/Book-Avg NWRS MSM Services Price/Book Expansion chart NWRS vs MSM 30 price/book NWRS MSM 30 Index MSM Services NWRS NWRS Price/Book - Avg MSM 30 Index MSM Price/Book Avg 39

BVPS EV/EBITDA PER Oman Telecom Sector Update Exhibit: Price Sensitivity Sensitivityto Price on 1% change in 2013-15E EBITDA and 0.1x change in EV/EBITDA 0.00 72 73 74 75 76 77 78 79 80 4x 0.487 0.

40 BVPS EV/EBITDA PER Oman Telecom Sector Update Exhibit: Price Sensitivity Sensitivityto Price on 1% change in E EBITDA and 0.1x change in EV/EBITDA x x x x x x x Price Sensisitivity to EPS and PER EPS Current Price/Book trading range

41 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Key Contacts Research Team Joice Mathew Santhosh Balakrishnan Head Office Senior Manager - Research Research Analyst P.O.BOX 2566, PC joice@usoman.com santhosh@usoman.com Next to Ruwi Hotel Tel: Tel: Ruwi, Muscat Tel: Rating Criteria and Definitions Rating >2 Strong Buy Buy Hold Neutral Sell Strong Sell -1 to -10 to - 2% >-2 Rating Definitions Strong Buy Buy Hold Neutral Sell Strong Sell Not rated This recommendation is used for stocks whose current market price offers a deep discount to our 12-Month target price and has an upside potential in excess of 2 This recommendation is used for stocks whose current market price offers a discount to our 12-Month target price and has an upside potential between 1 to 2 This recommendation is used for stocks whose current market price offers a discount to our 12-Month target price and has an upside potential between to 1 This recommendation is used for stocks whose current market price offers a premium to our 12-Month target price and has a downside side potential between to -1 This recommendation is used for stocks whose current market price offers a premium to our 12-Month target price and has a downside side potential between -1 to -2 This recommendation is used for stocks whose current market price offers a premium to our 12-Month target price and has a downside side potential in excess of 2 This recommendation used for stocks which does not form part of Coverage Universe Rating History DISCLAIMER: Stock This Price document Recommendation is not for public History distribution and has been furnished Recommendation to you solely for your History information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required Dateto observe Details these restrictions. Opinion expressed is our current opinion as of the date appearing 3.2 on this material only. We do not undertake to advise you as to any change 2-Aug-11 of our views Weexpressed recommended in this document. a BUY While on the we stock endeavor withto update a target on price a reasonable of RO , upside of 12% (CMP-2.362) basis the 2.4 information discussed in this material, United Securities, its subsidiaries and associated companies, their directors and employees are under no obligation to update 2.0 or keep the 1.6information current. Also, there may be regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned 1.2 that any forward-looking statements are not predictions and may be subject to change without notice. Our proprietary trading and investment businesses may make 0.8 investment decisions that are inconsistent with the recommendations expressed herein. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true and are for general guidance only. While every effort is made to ensure the accuracy and completeness of information contained, the company takes no guarantee and assumes no liability for any errors or omissions of the information. No one can use the information as the basis for any claim, demand or cause of action. Recipients of this Disclaimer material should rely on their own investigations and take their own professional advice. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future performance. United Securities LLC, and affiliates, including the analyst who has issued this report, may, on the date of this report, and from time to time, have long or short positions in, and buy or sell the securities of the companies mentioned herein or engage in any other transaction involving such securities and earn brokerage or compensation or act as advisor or have other potential conflict of interest with respect to company/ies mentioned herein or inconsistent with any recommendation and related information and opinions. United Securities LLC and affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. 41

Oman Telecom Sector February 28, 2011

Oman Telecom Sector February 28, 2011 OTEL CMP (RO) 1.156 Mcap (ROmn) 867 TP (RO) 1.379 Upside (%) 19.3 P/E 11f (x) 7.9 P/E 12f (x) 7.7 EV/E 11f (x) 3.8 EV/E 12f (x) 3.5 Jaspreet Chhabra Research Analyst jaspreet@shurooqsecurities.com Marwan