Deal in line with Omani incumbent’s diversification strategy.

Omantel on Thursday paid $846.1 million (€721.96 million) for a 9.84% stake in Kuwait-based Zain.

The Omani incumbent said the transaction, which is subject to regulatory approval, is part of its diversification strategy, positioning it as a leading digital service provider.

"This is in line with our ‘Corporate Strategy 3.0, launched in 2015," said Omantel’s chief financial officer Martial Caratti, in a statement. "We have always emphasised that growth will come from continued diversification, and this acquisition positions Omantel for the future."

Thursday’s deal significantly broadens Omantel’s horizons.

The telco’s revenue growth has flat-lined, with first quarter revenue edging down 1.2% year-on-year, as fixed and mobile broadband growth was unable to offset ongoing declines in revenues from wholesale and legacy services. With a market share of 57.5% and a revenue share of 59.7%, it therefore makes sense for Omantel to look outside its home market for new growth opportunities.

Omantel said it will explore ways to cooperate with Zain in a number of areas, including wholesale services, operations and networks, commercial activities, and knowledge-and-experience-sharing.

"It will also allow Omantel to gain exposure to nine growth markets with a total population of 175 million, and provide significant growth drivers across a range of services and applications," the telco said.

By comparison, Omantel ended March with 4.54 million subscribers, which includes reseller customers.