Strategic Management: Omantel

2021-07-22 10:24:53
7 pages
1730 words
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University of Richmond
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Essay
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Introduction

Oman Telecommunication Company, Omantel, is the first telecommunication company in Oman. To date, it is the strongest telecommunication company in Oman commanding a larger market share than its competitors. By virtue of this, Omantel has become the primary provider of internet and telecommunication services. The government of Oman is the largest shareholder of the company at 49%. Rapid technological advancements are the major challenge Omantel has to grapple with today (Al Raisi 2009, p. 28). Moreover, new entrants with the powerful Over the Top and non-traditional cloud-based technology have continued to give Omantel a run for its money. The ubiquity and increased affordability of communication gadgets have significantly changed the behavior of customers socio-technologically. As a consequence, a huge demand for high-speed internet and data communication in the recent past has emerged and the trend is expected to grow in the near future. The trends impact significantly on the performance of telecommunication companies and as such, adjusting accordingly has become inevitable for the companies. Omantel has revealed itself to the region on the technological front with the current establishment of 10 submarine cables including BBG, GBI, POI, OMRAN, Mena, SMW-3, Falcon, EPEG, TWA, EIG, and PLAG (Maguire, Ojiako, and Said 2010, p. 78F). Because of such steps, Omantel has outshined its peers thus enjoying significant dominance over them. The following paper, therefore, seeks to critically analyze and evaluate the key aspects of the strategic management in Omantel as well as comparing various theories and perspectives of strategic management in the same company. The paper will also critically evaluate various theories and concepts of strategic management.

Success Strategies

Omantel has become the epicenter of innovation and technological evolution not only in Oman but the region as a whole. Thanks to this fact, almost every industry that utilizes telecommunication in its operations is getting shaped accordingly. Enjoying the advantage it has over its competitors in terms of technology, Omantel blissfully takes advantage of its success to evolve at a blistering pace not only technologically but in myriad other fronts. In this regard though, the organization has faced a number of challenges including sectorial liberalization, stiffening regulatory regimes, and macroeconomic deterioration, that has threatened its growth (Noll 2016, p. 66). Part of Omantels technological strategy is to expand its IT infrastructure to build the necessary capabilities that will ensure it holds its position for the longest time. With the establishment of the submarine cables making Omantel a conspicuous international hub, the organization is well on the way to realizing its technological goals. Additionally, it strives to expand its regional and international organization in line with its core objectives to overcome the present day challenges and steer its operations beyond its traditional region. In 2015, the company initiated a project that would implement Fiber to the X (FTTX) technology in Oman (Roney, Mathew and Al Hajj 2017, p.5). FTTX is refers to a broadband network architecture that utilizes optical fiber to provide a section or the entire local loop used for last mile telecommunications. In line with industrial revolutionary trends currently playing out in the Oman domestic market, Omantels traditional business model is facing a challenge posed by telecom digitization. The recent telecom trends include diminishing growth in voice and messaging revenues, high mobile penetration, and enormous growth seen in broadband internet segments. In response to these dynamics, Omantel has shifted its focus to enhancing the experience as well as continuously upgrading their network and innovative services offerings. Moreover, the global communication dynamics is threatening the telecommunication operators business model. Even so, Omantel has rolled out a new strategy and whose implementation is currently underway. Fundamental elements of the new strategy have already been incorporated in the companys technological and financial planning.

On the financial front, Omantel has continued to work towards achieving their strategy christened the carrier or carriers. The success of this strategy is evidenced in the manner in which Omantel realized a sustainable revenue growth from its wholesale businesses within and outside its parent country (see appendix 3). This success is further cemented in how more international carriers and global players choose to be in partnership with Omantel to serve not only the country but also the region and beyond. Furthermore, the transaction benefits of Omantel positions it as a leading digital service provider. It starts with its acquisition of a minority stake which is part of the Omantels corporate strategy. The objective of the company is to diversify exposure and put the organization in a position for future growth. Furthermore, the financial benefits of the organization offer it a chance to cooperate across critical business functions. It will reconnoiter methods of cooperating with the business functions in myriad important areas including operations and network, wholesale telecom business, commercial activities as well as knowledge sharing. Besides, it will give Omantel the opportunity to gain the contact with nine growth markets with close to 175 million potential customers (Telecommunication Systems 2010 Referees 2010, p.405). Diversifying their income and enhancing the shareholder value is a financial strategy that will ensure the growth of profits which in turn leads to enhanced shareholder value (see appendix 2 and 4). While doing this, it is critical to explore other options for cost synergies through capital expenditure and operational cooperation. Finally, leveraging Zains international expansion and global scale is a critical financial strategic too (Peteraf 2015, p. 79). Zain is one of the best performing and innovative telecommunication companies with a complementary geographical footprint. It is arguably the most innovative service provider with cutting-edge technological advancements in the region of MENA (Hill et al. 2014, p.91). It also has an unwavering partnership with key players in the technology field world-over. Omantels move to acquire 10% of Zain, therefore, comes in handy in its journey to diversify its exposure (see appendix 1).

The major risks that Omantel faces include Liquidity risk, strategic risk, and product and in addition to market risk, political risk, reputation and environmental risk (Peteraf 2015, p. 16). The use of risk management by the organization plays a critical role in the regions economy. In this respect, Omantel applies risk management in two major areas in the telecom ecosystem: first, in new projects and secondly in ongoing operations. When initiating new projects, the organization applies risk management in all phases. For the ongoing operations especially when projects deliver services or even products that become part of Omantels regulation operations, risk management is applied accordingly. In all its risk management operations, Omantel has considerably achieved in mitigating uncertainty in the achievement of their business objectives. Besides, effective risk management has strengthened its governance initiatives. The most used risk management strategy by Omantel is risk limitation (Loncarski 2016, p.3). This strategy has significantly helped to limit the companys exposure by taking some concerns as actions. Farther its robust management, Omantel has what it takes to rise above the fray and re-establish its operations in line with its strategic plans. It can as well integrate its operations with the dynamics of technology revolution while addressing its risk exposure.

Omantel finds itself in an environment that is becoming increasingly diffuse yet interdependent. The evolution of technology and media is unprecedentedly fast thus posing a significant risk for communications operators. Even as the organization formulates and executes a number of approaches to target and take control of parts of this ecosystem, Omantel ensures that they appreciate their schemes in risk management in a bid to keep pace with the dynamics. The evolving telecommunication industry ecosystem brings with it as many opportunities as challenges (Rothaermel 2015, p.84). Consequently, unless Omantel formulates a solid underpinning of risk management, sustainability may just remain a mirage and so a reinforcement of that platform is inevitable. Omantel is vulnerable to different stages of risks including sales, marketing, project risks, budgeting risks, investment findings, among others. Indeterminate economic times in the recent past have been the major influence on the operation of the organization. A risk is a primary reason for uncertainty in the company, Omantel has sought to renewed converge to mitigate the risks. In its strategy to mitigate the risks, Omantel is putting much of its focus on identifying the risk since it is an important step in eventually managing them. Omantels risk management policy requires its business and support groups to assess the risks and determine whether they are acceptable under the existing controls or whether there is need for additional treatment, give appropriate response to the risk identified and thereafter monitor and give report on the present status of the various risks and the efficacy of their control models. Omantel manages its risks through the delegation of authority framework alongside other company policies which avail a framework for managing particular risks.

Strategic Implementation

Omantels almost dead human resource function has undergone through resuscitation in the recent past to become an integral component of a component of the organization's two-year plan. The strategy prioritizes customers and employees, innovation, and digital transformation. The HR staff has employed a proactive approach to dealing with other business functions which have changed attitudes in the working environment for the better (Abolfathi & Phene 2017, p. 51). The HR department only used to perform basic functions like payroll until the reconstruction by the CEO, Al Hosni. The reconstruction involved separating the functions of the department into three distinctive parts: planning, development, and delivery. The performance management employed by the administration worked excellently ensuring significant growth in performance among the staff members (Sesil 2017, p. 63). The employees are, therefore, important contributors to innovations and ideas in the organization. The vice president, Dr. Al Hosni is in the forefront of a revolution in the manner in which the function is perceived and operates as the organization shifts to a period of sporadic change. The heart of the Omantel HR strategy is engagement.

The innovation projects hatched by Omantel are shaping almost all other industries in the region. With its enormous technological advancement, the organization has been all about taking telecommunication to the next level. Embryonic developments including swift advancements in the internet-of-things singularity, the exponential rise in the use of data, a growing environment of connected devices as well as the infusion of e-marketing, e-business, and e-governance with data centered communication constantly bring a new definition to the concept of telecommunication (Abolfathi & Phene 2017, p.24). In turn, Omantel has outlined a comprehensive roadmap in a bid to cope up with sustainability. Amidst the dynamics of the market, Omantel is putting itself in the best position to customers as per their needs. Its corporate strategy 3.0 entails consideration of value ac...

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