Nawras IPO to launch on 15 September

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Muscat Securities MarketMuscat Securities Market

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Commenting on the announcement, Ross Cormack, Chief Executive Officer of Nawras, said:

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"For the last five years we have been dedicated to enriching the lives of people in Oman by providing them with better communications products and services. In this time we have grown rapidly to serve nearly two million customers, and counting, representing 45% of the Omani mobile market at the end of June 2010. With our unrelenting focus on customers, we have delivered innovative products and pleasingly different services - and we are determined to continue doing so.

"We see the listing as a key step in our development and growth and look forward to welcoming new investors to join our family and share our success."

Subject to CMA approval, the Offering will represent up to 40% of the company's total share capital and is expected to be launched after the Eid holidays on the 15^th of September, 2010. Retail and institutional investors will be able to participate in the offering, which will be the first IPO of 2010 in Oman and the first since the Sohar Power Company IPO in July 2008.

Nawras also announced that Morgan Stanley ,BankMuscatBankMuscat and QNB Capital have been appointed joint lead managers with Morgan Stanley and BankMuscatBankMuscat confirmed as bookrunners on the transaction.

Further information about the offering and full details of how investors can be a part of the Nawras success story will be announced in due course.

Strong track record of growth

Since it launched in 2005, Nawras has enjoyed an impressive record, acquiring more than 1.97million customers as at 30 June 2010, which represents a market share of 45%, according to the Telecommunications Regulatory Authority (TRA). In this time, Nawras has transformed the communications landscape in Oman - changing what people buy, how and where they buy it and how they pay for it.

Introducing innovative new services

Innovation has always been critical to Nawras' offering, which was the first in the market to introduce new technologies and services such as international roaming for prepaid customers, 3G+ services, prepaid mobile broadband, mobile TV and Shababiah, its youth sub-brand. Nawras' continued development of the customer experience includes the introduction of self service machines and e-recharge solutions.

Delivering high quality service

Nawras was the first operator in Oman to introduce 24/7 customer service, enabling us to reach customer satisfaction levels of 90% and above according to a January 2010 Ipsos customer survey. In 2007, 2008 and 2009, Nawras was voted best telecom brand in Oman by Oman's Business Today magazine and Comms MEA Middle East Mobile Operator of the Year for 2007. Nawras then went on to win their Customer Service Provider of the Year Award for 2009. Nawras has also achieved Superbrand status within Oman, according to the Superbrands Council of Oman; also winning Excellence in Branding & Marketing and Asia's Best Employer Brand Award in the CMO Asia Awards 2010 and global recognition with the award of the Global Brand Leadership Award in 2009 from the Global Awards for Brand Excellence.

Nationwide distribution

Nawras was also the first to introduce a nationwide partner-based dealer network selling Nawras products and services. This network has grown to over 1,600 dealers and 15,000 recharge outlets, bringing additional employment in the growing telecoms sector.

Modern and resilient network

Nawras has built a modern and resilient network and IT-systems, covering over 96% of the population with its EDGE enabled 2.75G network and 46% with its HSPA enabled 3.5G network. This radio network is connected to an IP/MPLS based fibre optic backbone network designed to handle current and future voice and data traffic growth.

New opportunity in fixed-line services

Nawras began providing fixed voice and data products and services from mid-2010. Nawras offers fixed products and services that are intended to complement and enhance its existing mobile and Internet products and services. Nawras intends to use its Fixed Licence to expand its reach into the corporate and broadband markets, as well as exploit available and anticipated local and international wholesale opportunities.

Experienced team

Since launch, Nawras has grown to over 850 employees, the majority of whom are locally recruited. Nawras has a senior management team with global and local telecom experience, many of whom have been in place since inception.

Future growth plans

Nawras' overarching goal is to become the full service provider of choice in Oman, offering a one-stop shop for business and residential customers, meeting all their telecommunications needs whether in the office or at home, mobile or fixed line, broadband or voice. This will be achieved by:

Maintaining a high share of net additions through attractive promotions and innovative offers, (ii) focusing on underpenetrated segments (e.g. broadband) and regions and (iii) continuing to provide excellent customer service.

Capturing a significant share of the fixed market by offering broadband coverage to business and residential customers and using Nawras' expanded product and service offerings to cross-sell products to its current mobile base, especially high-value customers.

Increasing share of the business market by developing innovative, reliable and integrated business products and services that are tailored to the specific needs of individual businesses while delivering high-quality customer service.

Developing wholesale opportunities through capturing a significant share of the reseller, international carrier and transmission wholesale opportunities that currently exist as well as ensuring that it is well positioned for future growth in these areas.

Reducing costs for international traffic through the implementation of Nawras' own international gateway in 2010 and international transmission facilities anticipated from 2011;

Financial performance

Nawras' success is reflected in its strong financial performance, with revenue growing from OMR 15 million in 2005 to OMR 172 million in 2009, driven by increased market share in the postpaid and prepaid mobile markets, and increased share of business customers. In the first half of 2010, revenues increased further from OMR 79 million in H1 2009 to OMR 91 million in H1 2010. Profitability has also been strong, with Nawras becoming EBITDA positive after only 15 months and net profit positive 30 months after launch. EBITDA grew to OMR 88 million in 2009, with an EBITDA margin of 51%. In the first half of the year, this trend continued with EBITDA growing from OMR 36 million for the six months ended 30 June 2009 (with an EBITDA margin of 45%) to OMR 51 million for the same period in 2010 (with an EBITDA margin of 56%).

Dividends

It is the current intention of Nawras to consider declaring dividends with respect to Financial Year 2010 onwards, with the first dividend payment therefore occurring in 2011 at the earliest. The level of such payment as a portion of our net income will be at least in-line with other publicly listed telecommunications companies in the Middle East region

Current Shareholders

70% of Nawras' shares are currently held by a joint venture between Qtel ("Qatar Telecom") and TDC. Nawras' relationship with Qtel has been a major catalyst of its success and growth. The joint venture will continue to hold a majority stake in Nawras post-IPO, and Nawras will continue to benefit from being a member of the Qtel Group.

The Qtel Group has operations in 16 countries and has over 65 million customers worldwide. Through this relationship, Nawras has benefited from receiving technical support in developing its network, industry best practice guidance, benchmarking initiatives to facilitate efficiency, as well as being able to leverage stronger purchasing power, recruit talented professionals and participate in regional initiatives.

Other existing Shareholders include the pension funds of the Diwan of the Royal Court, the Ministry of Defence, the Royal Office, the Internal Security Service and The Sultan's Special Force.

Bookbuilding is a method used to determine the share price of an offering, based on actual demand. It is an interactive mechanism by which institutional investors relay indications of demand and price preference to the bookrunners, in this case Morgan Stanley and BankMuscatBankMuscat. Bookbuilding is used extensively in other international markets although the Nawras' Offer represents the first time that it is being used within Oman.

The bookbuilding methodology will be used during the Offer Period to determine the Offer Price at which the Shares being offered are allotted to all investors. The Joint Bookrunners, the Selling Shareholders and the Company will use the information received from Category II Investors** during the Offer Period to determine the Offer Price, thus balancing demand and price and taking into account market conditions and the market's assessment of the Company's valuation. For further information please contact Capital MS&L - contact details are listed at the bottom of this press release.

** Institutional and individual investors who apply for a minimum of 500,100 Shares

Important Information

Making an investment in Nawras will carry certain risks, including those risks described in the prospectus. Prospective investors should carefully consider these risks in addition to all other information presented in the Prospectus, which can obtained once the offering is launched at branches of BankMuscatBankMuscat, National Bank of Oman, Ahli Bank and Oman Arab Bank or from our dedicated website [www.nawras-IPO.om], before deciding to invest in Nawras. Each prospective investor should consult their legal, tax and financial advisors regarding the appropriateness of making an investment in Nawras.

-Ends-

FORWARD-LOOKING STATEMENTS

This document contains certain "forward-looking statements". These forward-looking statements generally can be identified by words or phrases such as "aim", "anticipate", "believe", "expect", "estimate", "goal", "intend", "objective", "plan", "project", "shall", "will", "will continue", "will pursue" or other words or phrases of similar import. Similarly, statements that describe Nawras' strategies, objectives, plans or goals are also forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual outcomes to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from Nawras' expectations include, among others: the inability to estimate future performance; (ii) technological changes; (iii) regulatory changes in the telecommunications sector; (iv) the monetary and interest policies of Oman, local and international inflation, and local and international interest rates; (v) the ability to obtain adequate capital; (vi) general economic and business conditions in Oman which have an impact on Nawras' business activities; (vii) increasing competition; and (viii) the factors described in "Chapter XII - Risk Factors and Mitigants" of the prospectus. These factors, among others, could cause our actual results and performance to differ materially from the results and performance projected in, or implied by, the forward-looking statements.

Further information about Nawras can be found by visiting www.nawras.om, where it is easy to see why Nawras customers are consistently getting more from their mobile experience.

For further information
Sultanate of Oman: MPiRe,
Maurizio Monte
+968 95214290

GCC: Capital MS&L,
Campbell Hood
+971 566 906 012

International:
Capital MS&L,
Neil Doyle
+44 7771 978 220

Nicholas Bastin
+44 7931 500 066

Joint Bookrunners
Saman Raza, Morgan Stanley
+9714 3634836

Lovekesh Raj,
BankMuscatBankMuscat
+968 24768078

© Press Release 2010