Oman has granted a fixed-line telecommunications licence for the greater Muscat area to a consortium of Awaser Oman Company and Hong Kong's PCCW International, the regulator said on Monday, a decision that may squeeze earnings at Oman's existing operators.

The licence is valid for the Governorate of Muscat - home to about a quarter of Oman's estimated 2.8 million people - and will enable the consortium to provide fixed-line data and voice services for 25 years. PCCW International is a subsidiary of PCCW.

The consortium will compete against Oman Telecommunications Co (Omantel) and Nawras, a subsidiary of Qatar Telecom (Qtel).

As the former monopoly, Omantel has an extensive fixed-line network and this provided just over half of its revenue for the nine months to September 30, according to Reuters calculations. Fixed-line accounted for 18.5 per cent of Nawras's third-quarter revenue.

The Awaser-PCCW licence was awarded as fixed-line services lag mobile, which had penetration of 180 per cent - or 1.8 mobile subscriptions per person - at the end of June, according to Oman's Telecommunications Regulatory Authority.

Many people hold multiple mobile SIM cards and switch provider depending on which has the best offers for local and international services, with Omantel also hosting two mobile virtual network operators (MVNOs). MVNOs lease network capacity and usually target a particular economic or ethnic group.

Fixed-line take-up has been sluggish in comparison - penetration was only 10.7 percent at the end of June, up 0.6 percentage point since mid-2011, with just over a quarter of households using the Internet on a fixed connection.

Yet fixed-line Internet services are lucrative, with a monthly average revenue per user (ARPU) of RO32.071 ($83.30) in the second quarter, up 1.3 percent from the previous quarter. Mobile broadband penetration was 51 per cent at the end of June.-Reuters