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

Regional Multi-stakeholder Discussion Forum on
Rural ICT Development
Bangkok, Thailand, 4 July 2011
Content
1.
2.
3.
4.
5.
6.
7.

ICT Sector Overview
State Institutional Structure
Policy and Regulatory Frameworks
Funding Mechanism
Rural ICT Initiatives
Key Lessons
Future Actions
Overview
Location

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)
ICT Sector in Mongolia
Sector Players
 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
Infrastructure and Service
 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

Basic Indicators
100

90.3

90
82.2

80
70

65.7

60
50

Mobile
Fixed
Internet

45.3

40
30
20
10
0

29.9

7.0

21.5

7.2
3.9
1.5
0.6
0.4
0.3
2005
2006
2007
2008
2009
2010
6.8

7.4

6.5

6.8

6.8

Others
 ~7% in GDP
 74% of sector revenue is
generated from mobile sector
 5% of household income on
telecom

4
State Institutional Structure
President

Parliament
Prime Minister

Information, Commu
nications Technology
and Post Authority
(ICTPA)

Communications
Regulatory
Commission
(CRC)

Cabinet members of the
Government
Other Ministries

NetCo
CITIZENS, BUSINESSES, OTHER PUBLIC, AND PRIVATE ENTITIES

 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
 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)

Legal Framework
 Law on Communication (renewed
in 2001)
• Structure of
stakeholders, USOF, Licensing, c
ommunications networks etc.)

Regulatory Frameworks
 Licensing
(classifications, conditions, Issue, pr
olong 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)
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

SWN
Network expansion
Post
Maintain Fixed service
Internet Service
TV in rural
Radio in rural

2007-2009
55%
26%
7%
5%
0.50%
2%
4%

Program

SWN
Network expansion
Post
Maintain Fixed service
Internet Service
Internet Access equipment
Internet Exchange Center
Internet in remote area of UB
TV in rural

2010
18%
10%
4%
2%
11%
15%
23%
4%
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/longterm

 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
Herder Public access network
Soum center Wireless Network
(90 soums )
Soum and Aimag Center
Internet services (34 soums)

$ 970,000

$ 963,000

$6.300

$ 4,600,000

$3,000,000

$34.000

$ 1,160,000

$ 878,670.00

$25.000
3 Key Lessons from Project/Workshop


Strong Leadership to Support ICT initiatives



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





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

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




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





Ongoing evaluation and review of the effectiveness of the Strategy

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
USOF Effect For Mobile
service in Rural Area

Coverage increased

Competition and
Traffic increased

Increased subscribers

Decreased tariff

11
www.crc.gov.mn

Монгол Улсын
Overall impacts
Харилцаа Холбооны Зохицуулах Хороо
Mobile subscribers /2005.01.01-2010.06.30/
2,500,000

2,337,127

2,000,000

1,763,178

1,500,000

Total mobile subscribers in
Mongolia increased 4.3
times during this period

1,000,000

551,000
500,000

-

2005.01.01 он

2008 он
Үүрэн телефоны нийт хэрэглэгч

2010.06.30
www.crc.gov.mn

Overall impacts
Монгол Улсын
Харилцаа Холбооны Зохицуулах Хороо
Tariff decrease of mobile on-net voice and SMS /2005.01.01-2010.10.01/
180
166.5

160
140

138.5

Төгрөг

120

3 times decreased

100
80

2.7 times decreased
56

60

51

40

30

3 times decreased

20
10

0
Мессеж
дараа төлбөрт
урьдчилсан төлбөрт

2005.01.01

2010.10.01

30
138.5
166.5

10
51
56
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

14
THANK YOU

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Mongolia

  • 1. MONGOLIA Rural ICT Policy Advocacy, Knowledge Sharing and Capacity Building Regional Project Regional Multi-stakeholder Discussion Forum on Rural ICT Development Bangkok, Thailand, 4 July 2011
  • 2. Content 1. 2. 3. 4. 5. 6. 7. ICT Sector Overview State Institutional Structure Policy and Regulatory Frameworks Funding Mechanism Rural ICT Initiatives Key Lessons Future Actions
  • 3. Overview Location 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 Mongolia Sector Players  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 Infrastructure and Service  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 Basic Indicators 100 90.3 90 82.2 80 70 65.7 60 50 Mobile Fixed Internet 45.3 40 30 20 10 0 29.9 7.0 21.5 7.2 3.9 1.5 0.6 0.4 0.3 2005 2006 2007 2008 2009 2010 6.8 7.4 6.5 6.8 6.8 Others  ~7% in GDP  74% of sector revenue is generated from mobile sector  5% of household income on telecom 4
  • 5. State Institutional Structure President Parliament Prime Minister Information, Commu nications Technology and Post Authority (ICTPA) Communications Regulatory Commission (CRC) Cabinet members of the Government Other Ministries NetCo CITIZENS, BUSINESSES, OTHER PUBLIC, AND PRIVATE ENTITIES  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
  • 6. Policy and Regulatory Framework Policy 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) Legal Framework  Law on Communication (renewed in 2001) • Structure of stakeholders, USOF, Licensing, c ommunications networks etc.) Regulatory Frameworks  Licensing (classifications, conditions, Issue, pr olong 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)
  • 7. 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 SWN Network expansion Post Maintain Fixed service Internet Service TV in rural Radio in rural 2007-2009 55% 26% 7% 5% 0.50% 2% 4% Program SWN Network expansion Post Maintain Fixed service Internet Service Internet Access equipment Internet Exchange Center Internet in remote area of UB TV in rural 2010 18% 10% 4% 2% 11% 15% 23% 4% 12%
  • 8. 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/longterm  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 Herder Public access network Soum center Wireless Network (90 soums ) Soum and Aimag Center Internet services (34 soums) $ 970,000 $ 963,000 $6.300 $ 4,600,000 $3,000,000 $34.000 $ 1,160,000 $ 878,670.00 $25.000
  • 9. 3 Key Lessons from Project/Workshop  Strong Leadership to Support ICT initiatives   Cabinet-level ministry plays key role in coordinating ICT related initiatives. (Several funds)   Policy makers should recognize key benefits of the ICT (efficient infrastructure) 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   Not only Commercial center, but also Community center to provide E-government service and training (15-25%)   Ongoing evaluation and review of the effectiveness of the Strategy 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)
  • 10. 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 increased Competition and Traffic increased Increased subscribers Decreased tariff 11
  • 12. www.crc.gov.mn Монгол Улсын Overall impacts Харилцаа Холбооны Зохицуулах Хороо Mobile subscribers /2005.01.01-2010.06.30/ 2,500,000 2,337,127 2,000,000 1,763,178 1,500,000 Total mobile subscribers in Mongolia increased 4.3 times during this period 1,000,000 551,000 500,000 - 2005.01.01 он 2008 он Үүрэн телефоны нийт хэрэглэгч 2010.06.30
  • 13. www.crc.gov.mn Overall impacts Монгол Улсын Харилцаа Холбооны Зохицуулах Хороо Tariff decrease of mobile on-net voice and SMS /2005.01.01-2010.10.01/ 180 166.5 160 140 138.5 Төгрөг 120 3 times decreased 100 80 2.7 times decreased 56 60 51 40 30 3 times decreased 20 10 0 Мессеж дараа төлбөрт урьдчилсан төлбөрт 2005.01.01 2010.10.01 30 138.5 166.5 10 51 56
  • 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 14