An article to understand the impact of current developments in telecommunication and

transportation sector of Oman with an emphasis on global trade among Oman and its major
trading partners in East Asia

Salma Said Humaid Al-Naamani

Introduction and background

Chamber Oman (2009) mentioned that Oman is an Arabian state that has a good strategic location
in the south state of the Arabian Peninsula, it is overlooking by the Gulf of Oman, Arabian Sea,
and the Hormuz Strait. Chamber Oman (2009) added that transport and communications sector is
very basic in Oman which is helping in achieving the economic and social objectives.

The snapshot of the developments in the transportation sector in Oman can be understood from the
discussion below. Chamber Oman (2009) contented that Oman has spent several million dollars
to develop roads transports facilities. Chamber Oman (2009) gave that government develops
highways networks which links all regions of the state. Chamber Oman (2009) mentioned that,
furthermore, in air transport government of Oman had invested about US $ 3 billion to develop
the two airports of Muscat and Salalah and build three airports to be able to cope with the new
development in economy. Chamber Oman (2009) opined, in the field of sea transport there is a
new port in Duqm under construction and expansion of Khasab port is also happening. The changes
in the telecommunication sector of Oman are also noteworthy. Chamber Oman (2009) sited that
in telecommunication sector, Omantel was the one company which had a fixed line services until
2008. Chamber Oman (2009) added that Nawras appear to have added to the fixed line network,
thereby providing options to the end-user. Chamber Oman (2009) reported that, in addition, in
2008, The Telecommunications Regulatory Authority (TRA) gave licenses to five resellers of
mobiles in order to make more liberalization in telecom services in Oman. Al-Shihi & Naqvi
(2009) mentioned that the mobile users increased rapidly since 1996 where as using SMS grew
dramatically too since 2001. Al-Shihi & Naqvi (2009) concluded that mobiles phones became very
popular and more than 50% of the population uses it and most of the organizations in Oman use
it’s too. Internet world stats (2012) contented that in 2010 the users of internet in Oman became
around 1,236,700 persons which is around 41.7% of the population. Al-Shihi & Naqvi (2009)
added that, also, nowadays, internet is used in Oman to transfer the data, sending e-mails and doing
business. However, this study investigates that the current development in telecommunication and
transportation sectors of Oman and their influences on the nature of global trade networks between
Oman and its major trade partners in East Asia.

Objectives of the study

The main objective of the study is to find out how the current changes in telecommunication and
transportation in Oman impact on the nature of international trade between Oman and its major
trade partners in East Asia. The research will also offer some important information for all Omani
business owners who have business transactions with organizations in those three countries.
Furthermore, the discussion will look at the various and new ways in telecommunication and
transportation sectors in Oman which may help to develop and expand the trade that Oman has
with those three countries.

Findings from literature survey

Major trading partners of Oman in East Asia

Nations online (2012) listed the names of East Asian countries as China, Hong Kong SAR; China,
Macau SAR; China Tibet; Japan; Korea (North); Korea (South); Mongolia and Taiwan (Republic
of China). Yahia (2010) mentioned that Oman should consider the effect of trade between Oman
and its major trading Asian partners which are Emirates, Mainland China, Japan, Thailand and
South-Korea. Thus, the research will cover the three major trading East Asian partners namely,
Japan, China and South Korea.
Kawai & Wignaraja (2011) gave that Asian countries achieved deeper network of production with
other economies in the world in different areas of development. Young (2012) sited that East Asian
countries have strategy to use exports for expansion which will depend on health of the trading
system and open more markets globally. Ando (2006) discussed that the production of global trade
of East Asian countries has increased dramatically in the 1990s in both exports and imports. Dent
(1997) reported that even economic cooperation between EU and East Asia is underdeveloped.
Thus, this study found that global trade of East Asian countries increased rapidly. According to
information mentioned previously, East Asian countries are very important in the global trading
radar. So, from the researcher’s point of view it’s beneficial to know more about Oman and its
relationship with those three nations and if there are any changes that might have emanated owing
to the new development in the communication and transportation sector?

Historical relationship between Oman and East Asian countries

Kang (2010) sited that the ideas of Asian countries which are used in international system appeared
to date back to 1000 years if not more. Kang (2010) listed that Japan, China, Vietnam and Korea
were the basic actors in global system and no doubt understood membership requirements to be a
part of international society. Shaji (2006) mentioned that Historical records gave that Arabs
dominated the sea route to China which was called silk route. Shaji (2006) added that that around
750AD, an Omani merchant, Abu Obeida bin Abdulla bin Al Qasim, was the first Arab arrived to
China. Shaji (2006) reported that Omani people were deeply involved in commercial relationship
and trade with other nations like China, India and Africa. Shaji (2006) maintained that about 700
years ago, trading ships, which were built in Sur, Oman, sailed from Oman to China. Jewel of
Muscat (2012) reiterated that there are historical sources that point towards happenings a thousand
years ago as people travelled through sea routes between Oman and China. Jewel of Muscat (2012)
spoke about the merchants' ships of 9th century that sailed to different ports and subsequently to
Vietnam, Singapore, and South China Sea and finally towards Canton port. Therefore, according
to the secondary data researched it can be strongly inferred that Oman had strong relationship with
East Asian countries since hundreds of years using the traditional transportation like shipping. The
study therefore aims to discover and discuss how the new development in Oman in both the major
sectors of telecommunication and transportation helps to emphasis this historical trade
relationship, with a futuristic insight.

A snapshot of the relationship between Oman and the three major trade partners of East
Asia during the last few years
 Japan and China the major global economic drivers, Oman Observer (2011a) noted that it was
very important to have strong relations with both countries, primarily for economic, political and
cultural reasons. Oman O bserver (2011a) added that both of them were industrial giants giving
high possibilities in the fields of industry and business for Oman. Oman Observer (2011a)
opined that it is true there is a long historic understanding between Oman and Japan. Oman
Observer (2011a) sited that the presence of cultural links, for many generations between the two
parties. Fmprc.gov (2011) gave that the traditional friendly cooperative relations between the
Sultanate of Oman and the People's Republic of China to have develope d clearly in 2010.
Fmprc.gov (2011) added that in September 2010 both sides signed four documents on
cooperation in the trade, economic and cultural fields. Oman Observer (2011a) added that
similarly, the relationship between Oman and China increased both at a diplomatic and business
level. Oman Observer (2011a) sited that however, it is very essential both in commercial and
diplomatic terms that Oman keep very warm relationships with both the nations. Oman Time
(2011) sited that Oman was the third largest gas supplier amongst the GCC. Oman Time (2011)
mentioned that export to Japan from Oman increased by 35.95 % to $4,509.4 million and import
from Japan grew by 32.27 % to $3,114.0 million in 2010. Oman Time (2011) added that Motor
vehicles imports from Japa n increased from $1,902.9 million in 2009 to $2,634.7 million in
2010. Oman Time (2011)) presented the fact that Oman was the third largest importer of
Japanese automobile in the GCC countries. Oman Time (2011) reiterated new tyres imported
from Japan and electrical machinery increased by 24% and 16.34% respectively. Oman Time
(2011) contented that in 2010, volume of Omani crude oil exports to Japan jumped by 16.19% to
43.13 million barrels as compared to 37.1 million barrels in 2009. The second largest modern
day economy, China, English people daily (2005) reported that the free-trade agreement (FTA)
signed between the Gulf Cooperation Council and China would sow the seeds for escalating
business cooperation. English people daily (2005) highlighted on the framework of the
agreement on investment, trade, economic and technological cooperation were signed between
the two parties in 2004. English people daily (2005) mentioned that they had discussion
regarding trade liberalization and trade expansion. English p eople daily (2005)pointed out the
fact that FTA would reduce tariffs and build more cooperative relationship as China become the
third trading partner of the GCC after the USA and Japan. Ain alyaqeen (2011) pointed that trade
volume between Oman and China was about $10.7 billion in 2010 and in the first half of 2011
 was around $6 billion. Analyzing the information of the relationship between Oman and South
Korea, Oman Observer (2011b) mentioned that trade exchange history between Oman and Korea
dating back to hundreds of years. Oman Observer (2011b) added that the relation was reactivated
in 1974 followed the opening up of the embassy of Oman in Korea in 1984. Oman Observer
(2011b) gave that the investment volume between Oman and South Korea doubled several times
and reached about $4.7 billion in 2010. Oman Observer (2011b) provided information stating
that in 2010 it is expected that the exports of Oman to Korea are anticipated to reach $4.1 billion
and the imports of Oman from Korea are estimated to be abou t $465 million. Ministry of Foreign
affairs (2012) gave that Korean firms participated in the construction projects in Oman. Ministry
of Foreign affairs (2012) added Omani exports to South Korea increased to a large extent on the
basis of liquefied natural gas and crude oil in 2011. Ministry of Foreign affairs (2012) sited that
export and import between Oman and Korea was rapidly increasing as it moved from $2 billion
in 2004 to $5.7 billion in 2011. Ministry of Foreign affairs (2012) gave that the economic
partnership between Oman and South Korea will develop economy, energy, industry, technology
and peaceful use of nuclear power.

The changes in technologies of communication and transportation and its impact on the
study

Kibritcioglu (1998) mentioned that there is a huge change in the global trade because of the
technological development affecting transportation and telecommunication space between
countries and time spent on business transactions. Kibritcioglu (1998) cited that the global trade
of goods rose by 157%, while the international trade of service exports grew by 200% during the
last few decades. Kibritcioglu (1998) added that using of technology from 1980 to 1996 increased
by 8.1% from 2.3% in the period between 1980 and 1985. Tyree (1997) inferred that modern
technology is the combination of devices of communications and computers which help to change
the way of communicating the information between the people, which have had a major impact in
the last few decades. Tyree (1997) gave that the changed in technology impacted on the practices
of international trade. COMMUNICATIONS: There is a rapid change in the global
communication network. Tyree (1997) mentioned that within a few years businessmen changed
from using devices which need human efforts to those of computer networks which helps to make
direct connection between the countries and firms. Tyree (1997) added that the innovation of
electricity along with communications' services has high impact in global trade. There are different
technologies which are used in telecommunications like telephones, internet and fax machines.
Tyree (1997) added that Communications networks using computers have great effect on global
trade. Tutor2u (2012) mentioned that E-commerce is using the internet to have a trade worldwide.
Tutor2u (2012) cited the changed functioning of big businesses and markets operating on a
24x7x365 basis. Tutor2u (2012) added the growth of technology helped the domestic business to
grow and expand to other countries all around the world, like Amazon. Tyree (1997) added that
the second sort of technology of communication is Telephone. Tyree (1997) contented that the
telephonic communication had a high impact on international trade. The research would thrust
upon the first two types of telecommunication technologies, viz. internet and all types of
telephones.

Changes in the telecommunication sector of Oman and its impact on trading

Find outer (2012) listed that nowadays, there are five companies of telecommunication in Oman -
Oman Telecommunications Company (Omantel), Nawras Telecom, Samatel, Majan Telecom and
Renna. Chamber Oman (2009) mentioned that there were just two companies of
telecommunication in Oman until 2008. Chamber Oman (2009) added that, five companies have
a business of communication in Oman. Al-Shihi & Naqvi (2009) mentioned that users of mobiles
grew hugely since 1996 and using SMS increased dramatically since 2001. Al-Shihi & Naqvi
(2009) added that mobiles phones are very popular in Oman and most of the companies in Oman
and more than 50% of the population use it. Al-Shihi & Naqvi (2009) gave that, many people in
Oman use internet to sending e-mails, transfer the data, and doing business.

Table 1.1 Internet Users in Oman

 YEAR Users Population % Pop.

2000 90,000 2,424,422 3.8 %

2005 245,000 2,424,422 10.1 %

2010 1,236,700 2,967,717 41.7 %

Source: Internet world stats (2012)

Internet world stats (2012) mentioned that in year 2000, there were about 90,000 users of internet
in Oman which mean 3.8% of the population. Internet world stats (2012) added that in year 2010
about 1,236,700 persons use internet in Oman which were around 41.7% of the population. Oman
information center (2011a) mentioned that subscribers of Internet phone service number was
around 2.066,876 in the first quarter of 2011, which was about 1,847,223 in 2010, so, that mean
rose by 11.9%. Oman information center (2011a) added that subscribers of leased Internet lines
number became 3,627 in 2010, which grew by 0.6 %, to reach around 3,650 on April 2011. Hutton
(2009) added that E-commerce users were about 158,000 which mean around 5.62% of total
population. United Nations (2007) mentioned that Oman Telecommunications Company uses
company of Omania E-Commerce (Tejari Oman). United Nations (2007) added that Omania E-
Commerce (Tejari Oman) is an electronic purchase solutions, in which both buyers and suppliers
transact in spot auctions or purchasing. United Nations (2007) gave that by this way, e-
procurement solutions, the businesses and organizations able to increase client base, decrease costs
of transaction and cut the costs of purchases and brokerage with partners of business. Omantel
(2012) mentioned that the new Omantel Mobile Business data solution gives the chances to pay
just for what you have consumed? Omantel (2012) added that it provides users with unlimited
wireless using for the following, 3G modem, mobiles using and laptops anywhere, anytime.
Omantel (2012) gave that it can be used by small and large businesses.
Nawras (2012) mentioned that Nawras Business Solution helps you to manage and control the cost of your
mobile communications. Nawras (2012) gave that it helps businesses to manage the needs of
communications in business every day. Nawras (2012) sited that you can receive faxes in your mobile, free
calls for the mobiles numbers of the same company, you can access your e-mail and speak with your
customers directly and even connect the machines and offices via a special data line. Business Monitor
international (2012) mentioned that it will be a huge competition in the Oman
Telecommunications industry which will be very high in 2016 that include fixed line phones,
mobiles and internet segments. Therefore, from table 1.1 and from the data mentioned previously,
more competition in the communication industry in Oman during the current years. As a result,
the cost of calls and using the internet will be lower. The number of internet users and phones
increase yearly which lead to increase in E-commerce and international calls as well as growing
in international business of Oman with other countries. Thus, as it is mentioned previously, first, Oman
Time (2011) gave that in 2010 the export from Oman to Japan grew by 35.95 % to $4,509.4 million
and import to Oman from Japan went up by 32.27 % to $3,114.0 million. Second, Ain alyaqeen
(2011) pointed that volume of trade between Oman and China in 2010 was about $10.7 billion and
it’s reached around $6 billion in the first half of 2011. Third, Ministry of Foreign affairs (2012) sited
that import and export between Oman and Korea was rapidly growing to be $5.7 billion in 2011.
So, the changes in trade between Oman and those three countries are very high. So, the research
will investigate the ratio of communication effect on global trade between Oman and the three
majors’ partners in East Asia.

Transportation developments and its impact on trading/business in Oman

Tyree (1997) mentioned that TRANSPORT TECHNOLOGIES is another sort of technological

changes. Jacks and Pendakur (2008) mentioned that international trade grew 400% between 1870
and 1913. Jacks and Pendakur (2008) added that the transport revolution in the late nineteenth
century is the basic reason for the highest boom in global trade. Tyree (1997) mentioned that the
value and quantity of cargo distance of transferring it’s, and time required for shifting its all make
different for international trade. Tyree (1997) listed out; nowadays people use different types of
transportations which are, first, Trains. Tyree (1997) added that train makes the international trade
more effective several double of time than before. Blake (2010) mentioned that Oman planed to
have project of railway, Omani expect that it will decrease the cost of transportation. Blake (2010)
gave the contract of designing is 1.5 year and the whole railway project will take 5 years. Blake
(2010) sited that it will connect with the GCC railway network. Blake (2010) added that according
to Salim al-Affani, General Manager of Urban Planning at the Supreme Committee for Town
Planning, said project of the railway will as four phases which are Sohar-Muscat section (260 km),
Sohar - Khatmat Melaha section (58 km), the Muscat-Duqm section (526 km) and the Sohar-
Buraimi section (140 km). Thus, the whole project will be 984 km. Blake (2010) contented that
Omani Officials gave approval for two track lines construction that will be powered by electricity,
however, the speed of passenger trains200 km/h and 80 to 120 km/h for cargo trains.Tyree (1997)
added that a second type of transportations is Sailing Ships. Jacks, et al (2008) gave that Shipping
industry developed because of new technologies development, for example, invention of the
steamships. Tyree (1997) sited that the development that happened in the sailing ships has a
dramatic effect on global trade. Ministry of transport and communications (2010) mentioned that
eight major ports are available in Oman which is Sultan Qaboos port, port of Sohar, port of Khasab,
port of Salalah, Mina Al Fahal, port of Shinas, port of Duqm, Qalhat LNG. Ministry of transport
and communications (2010) added that Omani ports were there since the 10th century when Omani
merchant started business transactions with the countries and they arrived to China. Let’s start with
Sultan Qaboos port, Ministry of transport and communications (2010) sited that the Capacity of
the port is 300,000 TEU and 7 million FRT, whereas port of Salalah capacity more than 5 million
TEU and 10 million FRT. Ministry of transport and communications (2010) mentioned that while
port of Sohar Capacity is 5.3 million TEU. Whilst, port of Khasab capacity is 1 million FRT.
Ministry of transport and communications (2010) contented that port of Duqm constructions
started on November 2007 and will complete May 2012. Ministry of transport and communications
(2010) gave that the operation in Duqm port started on December 2010. Ministry of transport and
communications (2010) added that Fahal port has SBM (Single Buoy Mooring) Systems and
subsea pipeline which help to load refinery products and crude oil on to number of tankers off
Fahal port. Capacity of Fahal port is 85,000 barrels per day. Ministry of transport and
communications (2010) mentioned that Qalhat LNG is a plant of Liquid Natural Gas. About 3.3
million tons of natural gas yearly is exported through Qalhat LNG. Tyree (1997) mentioned that
the third type of transportations is Airplanes Tyree (1997) contented that airplanes help to take
the cargoes to clear directions in an essay ways comparing with the past. OAMC (2012a) added
that Oman Air cargo handling agent provides service for 24 hours for import and export cargo.
OMAC (2012b) mentioned that Muscat International Airport new terminal will be completed by
2014. OMAC (2012b) added that it is estimated that Muscat airport will handle about 12 million
passengers each year. OMAC (2012b) gave that more the airport will have more expansions which
will be enable to serve about 48 million passengers when it is required. OMAC (2012b) sited that
cargo terminal capacity will reach around 260,000 tons per year. Airport-technology.com (2012)
gave that there were about 5.75 million passengers recorded in Muscat airport in 2010 where as
the cargo handling was about 96,390t in the same year. OAMC (2012c), because of the new
terminal of Salalah Airport it is anticipated that the capacity of expansion will be around to 1
million passengers each year from 2014. If more requirements are there the expansion will be
about 6million passengers each year. Welcome to Oman (2011) mentioned that Muscat
International Airport and Salalah Airport has growth in both passengers’ traffic and cargoes during
the first half of 2011. Welcome to Oman (2011) added that according to the Statistics given by the
department of Air Transport at the Civil Aviation Affairs in the ministry of Transport and
Communications reported that passengers, transit and transferring passengers through Muscat
international airport has increased by 14% to 2,558,827 passengers at first half of 2011. Welcome
to Oman (2011) gave that by contrast, for the same period of 2010, it was 2,235,051 passengers.
Welcome to Oman (2011) sited that even arrival and departure passengers’ number through the
airport grew by 10% comparing with 2010. Welcome to Oman (2011) mentioned that air cargo at
Muscat International Airport, has a rough increase in the both unloaded and loaded freight by 1%.
Welcome to Oman (2011) gave that the shipments total was 39,514 tons in the first half of 2011
which was about 39,298 tons last year. Welcome to Oman (2011) added that during the same
period, passengers who used Salalah Airport has increased by 11 per cent to 195,109 which was
about 175,470 in 2010. Welcome to Oman (2011) sited that air cargo at Salalah Airport, 10%
increased in freight traffic has been recorded in total unloaded and loaded freight. Welcome to
Oman (2011) mentioned that the shipment increased to 554 tones which were 502 tons last year.
Let us to add roads as the fourth type. Roads in Oman are very necessary for transferring the goods
from one place to another. Oman Information Center (2011b) according to the interview with the
general manager of Strabag Oman LLC, Stefan Altziebler, told Salim Joseph that Oman had about
10km in Muscat in 1970. Oman Information Center (2011b) depending on the interview with the
general manager of Strabag Oman LLC, nowadays, Oman has very long road network of about
58,000 kilometers. Oman Information Center (2011b) sited that the general manager of Strabag
Oman LLC told the reporter that, within 5-10 years, Oman has many graded roads need to upgrade
and several road to be maintenance because of growth in economy. Oman Information Center
(2011b) added that Strabag Oman LLC general manger gave that, Oman transport network is one
of the basic goals to be complete by vision 2020. Oman Information Center (2011b) contented
that, according to general manager of Strabag Oman LLC, mentioned that some big projects are
there in Oman to be completed like Expressway of Muscat and the road of Bidbid-Sur during the
next 5-10 years. Oman Information Center (2011b) sited that, general manager of Strabag Oman
LLC, said that because of the increasing of road traffic each year by 6-7%, there are some plans to
have more projects until 2030. Oman Information Center (2011b) mentioned that, Strabag Oman
LLC general manager added that rail network in Oman will focus on moving the commodities
from the ports and places of storages to the consumers. Prabhu (2011) mentioned that the according
to Ministry of Transport and Communications (MoTC) senior official, total Strategic road projects
are more than 2,000 kilometers in length which are now under designing and development in
Oman. During this period of time till the year 2030, Oman will have a big network of roads. As
mentioned previously, it will be some developments in transportation sector in Oman. The new
changes are first; new rail ways connect regions of Oman with each other and Oman with the GCC
countries. Second, there are some changes in both Khasab port and Duqm port. Third, there are
huge expansions in both Muscat airport and Salalah airport. Fourth, there are some projects of
constructing the roads of Oman which are totally more than 2,000 kilometers until 2030. Therefore,
the research will discuss the current changes and development in all types of transportations in
Oman and how it will influence in emphases its trade relationship with its major partners in East
Asian countries?
Oman spent a huge amount of money to develop roads transports facilities, develops new highways
networks which links all regions of the state, reconstruct two airports and build three airports and
new development in port of Duqm and expansion of Khasab port in order to be able to face the
new requirements of the changes in the world (Chamber Oman, 2009). Based on the findings of
Oman Time (2011) in 2010 export from Oman to Japan grew by 35.95 % to $4,509.4 million and
import to Oman from Japan increased by 32.27 % to $3,114.0 million. Furthermore, according to
Ain Alyaqeen (2011), trade between Oman and China in 2010 was about $10.7 billion and was
about $6 billion in the first half of 2011. Moreover, based on the result of Ministry of Foreign
affairs (2012), Import and export between Oman and Korea grew dramatically which were around
$2 billion in 2004 and it reached about $5.7 billion in 2011. Therefore, the first two hypotheses
will be as the following:

Based on the previous information about import and export of Oman with the three major trade
partners in East Asia, and according to Chamber Oman (2009), Omantel and Nawras functioned
as communication operators in Oman and with the addition of five resellers now in Oman getting
the licenses from Telecommunications Regulatory Authority (TRA). As well as the findings of Al-
Shihi & Naqvi (2009) that using mobiles in Oman is very popular and about 50% of the population
use it. With regards to Internet world stats (2012) results that 41.7% of the population of Oman
use internet in 2010.
Projected Findings and major outcomes from the study:

It is projected that it will be positive and significant relation between the development of both
telecommunication and transportation sectors in Oman. Furthermore, it can be contented that
increasing in competition in telecommunication sector will have a higher impact on reducing the
price of using phones and internet; thus it is expected to increase the users of phones and E-
commerce with the three major trade partners in East Asia.

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