Omantel dials into corporate governance

0
128

Saud Mazrooei OmantelBy Saud Mazrooei, Company Secretary, Omantel Group and Company Secretary of the international Subsidiary

 

Omantel is the Sultanate of Oman’s first and leading integrated telecommunications services provider, enabling its digital society to flourish by delivering a world of information, news and entertainment. At Omantel, we work to boldly innovate, delivering the broadest and most reliable nationwide network, while investing for future development.

Omantel has been offering the full spectrum of telecommunications solutions to the people and businesses of Oman since the dawn of the renaissance in 1970 and, as a pillar of the Omani economy, the company has been a leading player in Oman’s progress and national development.

Omantel, which has a very strong brand presence in Oman, has been named the most valuable brand in the Sultanate by Brand Finance, as well as the best brand in Oman in general and among the telecom sector in particular. Omantel is also the largest listed company in Muscat Securities Market in terms of market value.

We are committed to adding outstanding value to our customers and stakeholders. To do that in the most agile and effective way, we developed Omantel 3.0, our new corporate strategy for 2015 to 2020. Omantel 3.0 will drive performance and focus the company’s efforts.

In addition, our sustainability strategy framework outlines our priorities to contribute to sustainable development. The changes that will be implemented strategically over six years will transform Omantel and the way that we do business, improving service to our customers and building on the strengths and opportunities of the telecommunications market in Oman and regionally.

Omantel was originally established in 1980 pursuant to Law No. 43 of 1980 as the General Telecommunications Organisation (GTO) to provide domestic and international telecommunication services within Oman. In 1999, Omantel was incorporated as a closed joint stock company under the First Omantel Decree following the transformation of the GTO, which involved the creation of Omantel to replace the GTO, paving the way for the privatisation of the telecommunications industry in line with the government’s policy of liberalisation and deregulation.

In July 2005, the government sold 30 per cent of its stake in Omantel, representing 225,000,000 ordinary shares (the IPO). In April 2014, the government sold an additional 19 per cent of its stake in Omantel, representing 142,000,000 ordinary shares, in a public offering to Omani institutions and individuals. Today, the government of Oman owns a 51 per cent share in Omantel.

Omantel is registered with the Ministry of Commerce & Industry and its shares have been listed on the Muscat Securities Market since 2005. The board and management of Omantel are committed to ensuring that the company adheres to a high standard of ethical corporate governance. The board regularly reviews and assesses the prevailing governance structures and processes to ensure that they are consistent with international best practices in both form and substance.

Omantel continues to stand out among the Sultanate’s corporate sector through its high investor grade ratings. We maintained our ‘BBB’ and ‘A3’ ratings assigned by Standard & Poor’s and Moody’s respectively. These ratings are reflective of our strong and sustainable financial position in the Sultanate’s fixed line and mobile telephony markets, solid competitiveness, operating performance and above average profitability.

OmantelAs the nation’s pioneering telecommunications service provider, we are working to connect even the most remote communities in Oman to each other and to the rest of the world. Omantel’s integrated telecommunication solutions service the needs of individuals, public and private organisations in addition to local and international telecom companies. We offer the broadest choice, widest coverage and state-of-the-art mobile and fixed broadband services and we are constantly expanding our networks to ensure even better customer experience.

Omantel has laid out a ‘carrier of carriers’ strategy as part of the wholesale business to achieve a sustainable revenue growth, which is increasingly evident for its successful execution of this strategy and the fact that more and more global content players and international carriers select Omantel as their partner to serve the region and beyond. In the international wholesale arena, Omantel is considered one of the most prominent, attractive and competitive wholesale telecommunication providers in the Middle East region. Currently, we have 11 international submarine cable landings and expect to touch 14 cable landings in Year 2017. We are one of the leading companies in the field of submarine cable networks that link Asia, Europe and America passing through Oman to meet the international capacity requirements of customers locally and internationally, thereby sustaining the company’s leading position among its competitors.

Guiding principles and foundations

Omantel works closely with community groups and organisations to make a meaningful difference to the future development of the nation. We spend on average $4million per annum in a number of community support initiatives, sporting events and corporate social responsibility programmes.

Omantel is committed to the highest standards of the code of corporate governance.  In pursuit of this goal, it has embarked upon various principles of the code with regard to the appointment of members of the board of directors, ensuring the adequacy and efficiency of internal controls in all aspects of the company’s operations and transparency in business dealings.

The company is committed to Capital Market Authority’s (CMA) standards and guidelines on disclosure of material information. Further, it is committed to the rules and regulations issued by the Telecommunications Regulatory Authority. The financial statements are prepared in accordance with International Financial Reporting Standards and the disclosure requirements set out in the rules for disclosure and proformas issued by the CMA and comply with the requirements of the Commercial Companies Law of 1974, as amended.

Since 2005, Omantel has been publishing yearly audited financial statements and quarterly reviewed financial statements without any audit qualifications. Omantel follows the industry’s best practices in maintaining confidentiality of material operational and financial information. Stringent confidentiality measures are in place to limit the audience of strategic information prior to its mandatory disclosure to avoid foul practices, such as insider trading and/or other abuses.

The system of corporate governance adopted by Omantel, which is defined according to international standards, is focussed on the leadership role in strategic decision-making by the board of directors, on the transparency of management choices, both within the company as well as in respect to the market, on the efficiency and effectiveness of the internal control system, on the strict discipline of potential conflicts of interest and on firm guiding principles of conduct for transactions with related parties.

All related party transactions in particular, are undertaken in line with principles of the code of corporate governance and are validated by Omantel’s Board/AGM on a case basis. Any member of Omantel’s board/audit committee, who may be party to such a transaction, does not participate in the decision-making process. Internal audit reports directly to the audit committee are fully independent of management, and their appointment, remunerations and other HR-related aspects are approved by the board’s HR committee.

Composition of the board of directors

The board of directors of the company is composed of nine members with five members representing the government share, including the board chairman. The other four members are elected by the AGM every three years.

The appointment of the members of the company’s board of directors representing the government share is subject to the same procedures followed in the appointment of board members representing the government share in other companies. As for members of the board representing the private sector, they are elected at the general meeting by following the procedures laid down in the commercial companies law and rules and regulations issued by the CMA.

The board has established four principal committees to review and decide on specific matters. The committees are given responsibility for specific areas of significance to Omantel’s corporate governance and assist the board in discharging its responsibilities by advising and making recommendations
to the board.

Each committee comprises a chairman and is composed of at least three members of the board. The committees are:

  • Executive committee, comprising of five members from the board, is considered as mini board and is mandated to oversee various strategic aspects, such as annual business plan, budget and corporate strategies, etc
  • Audit committee, comprising of five members from the board, is responsible for all audit and review of financials, procedures, policies and risks assessment procedures
  • Human resource committee, comprising of four members, is responsible for all HR policy and procedures, head count, remuneration, training and development etc
  • Tender committee, comprising of five members, is responsible for setting up tendering process & procedures, awarding tenders, etc

Members of the board are entitled to remuneration for the services rendered by them, which is determined by a meeting of the general assembly.

Awards and accolades

Over the years, the company has accumulated a growing collection of awards and accolades. Omantel was voted Leading Corporate for Investor Relations and Best Investor Relations Professional in Oman for 2015 at the seventh Annual Middle East Investor Relations Society (ME-IRS) award ceremony held in Dubai. It was voted as the Most Trusted Brand in the Telecom Sector in the Sultanate by Oman Economic Review.

The company has also, maintained its position as Oman’s Most Valuable Brand, according to a study published by Brand Finance, one of the world’s leading intangible assets and brand valuation independent consultancies.  Omantel was named the Best Performing Company in Muscat Securities Market by Oman Economic Review for the 10th consecutive year.

Methods of communication with shareholders and investors

Our quarterly financial reports are published in the local newspapers and are also uploaded to the website of Muscat Securities Market and on our website. In addition, the shareholders are notified of the details of the financial results individually at their request. 

We have a dynamic website detailing our company profile and services. We conduct quarterly conference calls, carry out roadshows and participate in local, regional and international one-on-one investor conferences. We also publish an annual report including all of the financial results and details of our management and governance. Since 2013, we also publish comprehensive sustainability reports. This award from Ethical Boardroom is a welcome recognition of Omantel’s efforts in regard to ethical governance and sustainable business practices.