US embassy cable - 05MUSCAT1500

UNCLAS SECTION 01 OF 02 MUSCAT 001500 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/ARPI, NEA/PI, EB/CIP/BA, EB/CBA 
USDOC FOR BIS - DMCCORMICK, DJACKSON, WWYSONG 
USDOC FOR ITA - PLICTENBAUM 
STATE PASS USTR FOR JBUNTIN 
 
E.O. 12958: N/A 
TAGS: BEXP, ECON, ECPS, KBCT, MU, Economic Affairs 
SUBJECT: OMANTEL PRESIDENT TALKS BUSINESS, BOYCOTT 
 
1. (U) Summary: A meeting between Omantel's Executive 
President, Embassy and U.S. Department of Commerce officials 
produced positive results in removing boycott language from 
company documents.  The company's president also stressed the 
importance of streamlining procurement decisions to Omantel's 
future.  He lamented what he sees as the inability of U.S. 
executives to build complete relationships with Omani 
counterparts as a key impediment to doing business in Oman. 
End Summary. 
 
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BOYCOTT LANGUAGE: STRIKE IT OUT 
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2. (U) On October 1, Econoff, accompanied by the U.S. 
Department of Commerce's Office of Antiboycott Compliance 
Director Edward Weant and Attorney Frederick Davidson, met 
with Omantel acting Executive President Tariq Ali al-Amri to 
discuss Omantel's use of Israeli boycott language in its 
commercial documents.  From a commercial point of view, 
al-Amri agreed that the boycott language should be 
eliminated, as his main objective was getting the best deal 
for his shareholders.  However, al-Amri noted that Omantel 
was simply following government directives on this issue, and 
thus referred us to the source of the language.  (Note: 
Econoff and DOC raised the issue with the Ministry of 
Commerce and Industry earlier that day, during which we 
received a written statement from Minister Maqbool bin Ali 
Sultan that Oman did not apply any aspect of the boycott or 
had any laws to that effect. End note.)  Upon reviewing this 
issue with his legal office, which informed him that the 
government did not require such language, al-Amri assured us 
that the boycott language would be eliminated. 
 
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OMANTEL LOOKING FOR FLEXIBILITY 
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3. (SBU) Al-Amri then spoke of his dissatisfaction with the 
current tender process for Omantel, which he considered to be 
sluggish and inefficient.  He envisioned Omantel moving away 
from the government tender board, which took between 3-6 
months to award a contract, toward one run by Omantel, which 
would take as little as two days to reach a decision.  (Note: 
Following a July 2005 IPO involving 30% of company stock, 
Omantel is in the process of transforming from a 
government-owned entity to a semi-privatized one, which 
includes divorcing itself from certain aspects of government 
oversight and regulation.  End note.)  Al-Amri also spoke of 
Omantel's improved position in negotiating deals with 
vendors.  He conveyed his view that vendors previously had 
the "upper-hand" in the business relationship, leaving 
Omantel stuck with what he considered substandard equipment. 
 
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DISCONNECT WITH AMERICAN BUSINESSES 
----------------------------------- 
 
4. (U) Al-Amri expressed strong views concerning the conduct 
of U.S. business executives in Oman.  He prefaced his 
comments by noting that U.S. corporations were relatively new 
to the Omani market, and therefore unaccustomed to Omani 
business practices.  He found, however, that his recent 
contacts with U.S. executives had not been very encouraging. 
 
5. (U) Al-Amri conveyed his perception that U.S. executives 
do not extend to their Omani counterparts the same level of 
professionalism that al-Amri had seen them exhibit toward 
fellow American counterparts. (Note: Al-Amri earned both his 
undergraduate and graduate degrees in the United States, and 
commented that his best years were spent there. End note.) 
Al-Amri stressed the need for U.S. executives to adopt a 
holistic approach toward developing their relationships with 
potential Omani clients, rather than focusing exclusively on 
their own company's bottom line.  Al-Amri referred to the 
assistance Siemens provided to Omantel following recent flood 
damage to its facilities in Salalah as an example of a 
company that understands and values its relationship with 
Omantel. 
 
6. (SBU) In commenting on Hewlett-Packard's recent loss on an 
Omantel tender contract, al-Amri mused that HP failed to 
demonstrate how it could provide value to Omantel.  He 
cautioned that Omantel would not pay a premium just because 
the company is American.  He considered the combined factors 
of quality, price, service, and partnership as tantamount to 
winning bids.  On the positive side of the ledger, al-Amri 
found that American executives employ a high standard of 
business ethics and are well-versed in the products that they 
sell, particularly in comparison to Chinese competitors. 
BALTIMORE