On March 14, it was reported that Huawei and Oman’s largest state-run telecommunications company, Omantel, entered into a tri-party “Proof of Concept” agreement with the operator of Sohar Port to deploy 5G and artificial intelligence capabilities at the port’s container handling terminal. The agreement was the latest indicator of Chinese interest and/or investment in the port, building on expressions of interest from Beijing that were initially reported in 2015 concerning the development and expansion of Sohar Port under the banner of its Maritime Silk Road ambitions.
China’s interest in the port has been attributed to its strategic location on the Strait of Hormuz — a critical passageway for maritime trade between Asia and Europe. Situated on the Gulf of Oman, approximately 200 km from Muscat and 160 km from Dubai, the port also has the potential to become an important hub for trade with Iran and the Arabian peninsula.
Since 2005, the operator of Sohar Port has been Hutchison Ports Sohar, a joint-venture between Hong Kong-based Hutchison Ports, the Government of the Sultanate of Oman, Netherlands-based Steinweg, and an amalgam of individual Omani investors. News of the 5G and AI agreement follows a separate agreement signed just last month between Sohar Port and Hutchison Ports Sohar to conduct a feasibility study for the port’s expansion.
For Oman’s part, the expansion and development of its ports into international transshipment logistics hubs is an important part of its strategy to diversify its economy and dilute its current financial dependence on oil and gas.
Beyond just the Port of Sohar, Huawei has had a significant relationship with Omantel. In February 2020, a 5G network deployment deal with Huawei was approved. Between 2020 and 2024, Omantel aims to establish more than 2,200 5G sites across the Sultanate. Huawei is reportedly among “multiple” service providers for this initiative. The Chinese company was also a primary vendor for Omantel’s previous 4G deployment.