MONGOLIA

Regional Multi-stakeholder Discussion Forum on Rural ICT Development

Bangkok, Thailand, 4 July 2011

Rural ICT Policy Advocacy, Knowledge Sharing and Capacity Building Regional Project

Content1. ICT Sector Overview2. State Institutional Structure3. Policy and Regulatory Frameworks4. Funding Mechanism5. Rural ICT Initiatives6. Key Lessons7. Future Actions

OverviewLocation Northeast Asia,

between China and Russia (landlocked)

Population 2.7mln

Territory: 1,566,500 sq.km

Lower-Middle (“LM”) income country by the World Bank

Timeline of ICT Sector Development• Separate Business from Policy (1992)• Sector Reform (1993-1994)• Restructuring & Privatization (1995)• Law on Communication (1995)• From Analogue to Digital (1995)• Competition in a telecom market (1996)• liberalization (2001 - 2006)• Renewed Law on Communication (2001)• Establishment of CRC (2002)• Establishment of ICTPA (2004)

• Sharpening of the Mobile Market competition (2006)

• Universal service/Universal access policy (from 2007)

4

ICT Sector in MongoliaSector Players Basic Indicators

Infrastructure and Service Others

Fixed line operator – 4 Mobile network operator – 4 (3G license in 2009) ISPs – 77 International VoIP service

provider - 28 IPTV – 2 in 2009 Mobile TV – 2 in 2009

2005 2006 2007 2008 2009 20100

10

20

30

40

50

60

70

80

90

100

21.5

29.9

45.3

65.7

82.2

90.3

6.8 7.4 6.5 6.8 6.8

7

0.3 0.40.600000000

0000011.5 3.9 7.2

MobileFixedInternet

~7% in GDP 74% of sector revenue is

generated from mobile sector 5% of household income on

telecom

161 soums (village) are connected by FO out of 331

Over 12.000 km fiber optic (state and private)

All of the soums have at least 1 mobile operator’s service

Most of them have no Internet

State Institutional Structure

President Parliament

Prime Minister

Information, Communications

Technology and Post Authority (ICTPA)

Communications Regulatory Commission

(CRC)

Cabinet members of the Government

CITIZENS, BUSINESSES, OTHER PUBLIC, AND PRIVATE ENTITIES

Other Ministries

NetCo

Telecoms and IT sectors are overseen by ICTPA, regulatory function by CRC in telecoms

Both institutions report to the Prime Minister– No cabinet-level Ministry responsible for policy-making

Transitioned from a Ministerial policy function to that of the ICTPA

Policy and Regulatory Framework

Policy Frameworks Regulatory Frameworks

ICT Vision up to 2010 (Parliament of Mongolia, 2000)

E-Government Master Plan for 2005-2010 (ICTA, 2006)

E-Mongolia National Program for 2005-2012 (ICTA, 2005)

National Broadband program (ICTPA, 2011)

Policy Guidelines (GSM 1800, Broadcasting of Digital TV, 3G, WLL etc.)

Draft ICT Government Policy for 2021 (ICTPA, 2011)

Licensing (classifications, conditions, Issue, prolong and cancel licenses and radio frequency)

Numbering Regulatory service fees Monitoring QOS Complains and disputes Methodologies for service tariff Determining and controlling

dominants Access & interconnection

Privatization & Restructuring

Separated Service from Network (1995) GOM sold a 40% share of Service

Company (MTC) to Korea Telecom Two separated companies “NetCo”

offering wholesale network services on a non-exclusive basis and “ServCo” offering retail services (2007)

Legal Framework

Law on Communication (renewed in 2001)

• Structure of stakeholders, USOF, Licensing, communications networks etc.)

Funding Mechanism USOF is Legally created in 2001 / operational in 2007 USOF was able to fully take advantage of the practical experience

gained working with 2006 WB Pilot projects USOF is composed from 2% levies of taxable revenues of

communications service providers 95% is generated from Telecommunications (by 2010) Control of USOF transferred from CRC to the ICTPA in 2009 For 2007-2010, USOF disbursed about 85% of collections ($8m) Expenditure of USOF

Program 2007-2009SWN 55%Network expansion 26%Post 7%Maintain Fixed service 5%Internet Service 0.50%TV in rural 2%Radio in rural 4%

Program 2010SWN 18%Network expansion 10%Post 4%Maintain Fixed service 2%Internet Service 11%Internet Access equipment 15%Internet Exchange Center 23%Internet in remote area of UB 4%TV in rural 12%

Rural ICT initiatives Situation of Rural ICT Fixed and mobile teledensity are four to five times higher in the urban Mongolia likely to have 40% of population living in rural areas in mid/long-term

Voice component of universal service is close to being achieved - progress has been undertaken relatively very quickly (in the last 5 years)

Next challenge is the wide-spread roll-out and adoption of broadband E-Mongolia National Program

Target achievement has varied, with overall about 70%. To date, actual budget has been about 46% of planned.

World Bank financed UAS Program (ICIDP) A series of World Bank-funded activities that included pilot projects and

culminated in the UA/US Program provided technical assistance and subsidy financing (US $5 million) over the period 2005-08 for UAS promotion

Program Maximum subsidy Winning bid Average subsidyHerder Public access network $ 970,000 $ 963,000 $6.300

Soum center Wireless Network (90 soums )

$ 4,600,000 $3,000,000 $34.000

Soum and Aimag Center Internet services (34 soums)

$ 1,160,000 $ 878,670.00 $25.000

3 Key Lessons from Project/Workshop Strong Leadership to Support ICT initiatives

Policy makers should recognize key benefits of the ICT (efficient infrastructure)

Cabinet-level ministry plays key role in coordinating ICT related initiatives. (Several funds)

Most of the countries have strong financial support from the Government on the rural ICT development. (PPP)

Sustainability of the project (Telecenter/Internet Café) Local Governors should play important role in developing rural ICT

Well trained personnel to manage service, attract others (Champions)

To assist on further rural development and infrastructure construction

Ongoing evaluation and review of the effectiveness of the Strategy

Not only Commercial center, but also Community center to provide E-government service and training (15-25%)

Not only basic telephony service, but also Advanced telecom services

Long Term Policy/Master plan on US/UA program and USOF Set very specific, clearly defined target on the UA/US on long term Policy

Public consultation and transparency of the Policy plays important role

Conduct economic research and result of the initiatives

Separate Policies on both connected and unconnected areas (by backbone network)

Enabling market environment (unified licensing)

3 Objectives for Follow-up Backbone network

All the economically beneficial areas are already connected to the national backbone network. Therefore in order to reach backbone network to underserved areas, to conduct research on implementing PPP initiatives based on the best practices

To build up right mechanism to monitor and evaluate initiatives on feasibility

Broadband access to rural inhabitants (policy in a high-level decree)

Enable broadband access to households and build up broadband enabled public community center in every villages, accordingly develop local content

ICT vision up to 2021 - Set long term specific targets on UA/US and make it open and transparent (public consultation, public announcement)

Coordinate with other sectors, especially health, education and agriculture

Policy and legal environment

Legislate some important issues such as to Increase responsibilities of Local governors’, coordination with other infrastructure development etc

11

USOF Effect For Mobile service in Rural Area

Coverage increasedCompetition and Traffic increased

Decreased tariffIncreased subscribers

www.crc.gov.mn

Mobile subscribers /2005.01.01-2010.06.30/

2005.01.01 он 2008 он 2010.06.30 -

500,000

1,000,000

1,500,000

2,000,000

2,500,000

551,000

1,763,178

2,337,127

Үүрэн телефоны нийт хэрэглэгч

Total mobile subscribers in Mongolia increased 4.3 times during this period

Монгол Улсын Харилцаа Холбооны Зохицуулах Хороо

Overall impacts

www.crc.gov.mn

2005.01.01 2010.10.01

Мессеж 30 10

дараа төлбөрт 138.5 51

урьдчилсан төлбөрт 166.5 56

10

30

50

70

90

110

130

150

170

30

10

138.5

51

166.5

56

Төг

рөг

3 times decreased

2.7 times decreased

3 times decreased

Tariff decrease of mobile on-net voice and SMS /2005.01.01-2010.10.01/

Монгол Улсын Харилцаа Холбооны Зохицуулах Хороо

Overall impacts

14

Public access point of SWN project Location: Tes soum /150 km from province center/ , Uvs province /1417 km from UB,

Distance: 35km from Tes soum

THANK YOU