 | Issue: | Global-ICT 2007 |
| Article no.: | 6 | |
| Topic: | Information and communications sector development in Mongolia | |
| Author: | Ayush Munkhbat | |
| Title: | General Director | |
| Organisation: | Policy Implementation, Information and Communications Technology Authority (ICTA) Regulatory Department, Government of Mongolia | |
| PDF size: | 216KB |
About author
Mr Ayush Munkhbat is currently the General Director of Policy Implementation of the Regulatory Department at Mongolia’s Information and Communications Technology Authority (ICTA) and a member of the MonCERT Board of Directors. Mr Munkhbat is also a NETCO board member and CEO of the ICT HR foundation. Mr Munkhbat began his career as the Director of E-Mongolia, a private company which pre-dated, and later named, the Mongolian Government’s vision for the nation’s E-Mongolia programme. Mr Munkhbat graduated with a degree in mathematics from the Mongolian National University.
Article abstract
Mongolia needs to harness ICTs to drive and catalyse its socioeconomic development. It is working to deal with legal issues, the expansion of privatisation (the separation of networks and services), policy and regulatory issues, its Universal Service Obligation Fund, and public private partnership initiatives. It is expanding its infrastructure in cooperation with international institutions, initiating projects based on public private partnerships, and Universal Service Obligation funding to provide access to ICT, and training in its use, to its entire population.
Full Article
Developing countries like Mongolia recognise the need to harness ICT applications for development. The Parliament of Mongolia and the Government of Mongolia (GoM) have given high priority to ICT as a tool to drive and catalyse the socioeconomic development of Mongolia in the 21st century. Establishing e-Government will increase public involvement in the activities of the state. The e-Government programme will bring smart services that reduce bureaucracy, improve information availability and serve as a foundation for Mongolia’s information society. Mongolia must still resolve a variety of issues to put its vision into practice, including legal issues, implementation of the second stage of privatization (separation of network and services), policy and regulatory issues, universal service obligation fund, and public/ private sector partnership initiatives. Legal and policy frameworks The Information and Communications Technology Authority (ICTA) of Mongolia is responsible for all ICT policies, coordination and implementation under the direct auspices of the Prime Minister of Mongolia. Mongolia’s Government gives high priority to the ICT sector, which it regards as essential to its developmental strategies. The GoM’s Communications Law of 2001 established the Communications Regulatory Commission to regulate the ICT and telecoms sector. The Government also approved a Mid-term Strategy for the Development of the ICT Sector, the Action Plan of January 2004, the e-Government Master Plan and, subsequently, the e-Mongolia national programme in October 2005. The Government’s Special Fund Law, ratified by the Parliament of Mongolia in August 2006, established the USOF (Universal Service Obligation Fund). The Government’s Action Plan defines the practical actions needed to introduce e-Government into all government institutions, at all levels, and to modernise and centralise the basic telecommunications network. The plan calls for Mongolia’s interconnection with international broadband networks, the creation of an integrated information system covering the whole country, an integrated network connecting all hospitals, and the introduction of computers with appropriate energy sources in homes and schools in all population centres. The e-Mongolia National Programme, planned to establish the foundations of a knowledge-based society in Mongolia through the extensive application of ICT in all sectors of society, envisions making Mongolia, per capita, one of the top ten ICT-using countries in Asia by 2012. To develop human resources, the government intends to: (i) include IT in its educational curriculum; (ii) provide the population with IT basic training, support primary, intermediary and advanced IT courses and centres using financial incentives and other policies, encourage wide-scale public involvement; and, (iii) develop ICT-based distance learning for formal education and stimulate training centres that use ICT-based methodology and course materials. To support the development of private sector business, the Government is creating a policy and regulatory environment favourable to public and private partnership (PPP) in the ICT sector, especially – as a first step – for the renovation of the backbone telecommunications network. Telecommunication and IT infrastructure The state-owned-Mongolian telecommunication backbone network consists of approximately 1,400km of digital microwave, more than 7,300km of optical cable, and more than 20 VSAT systems linked to Ulaanbaatar and all provincial centres. Mongolia’s 302 telephone exchanges can switch up to 156,500 telephone lines; 168,000 lines are currently in service. More than 99 per cent of the total switching capacity and 95 per cent of the transmission network is digital. Mongolia has made considerable progress in developing its information and communications infrastructure, particularly modern basic service and cellular services. Main lines grew from 3.5 per 100 inhabitants in 1996 to 6.1 in 2006. Cellular subscribers grew from 1,800 in 1996 to one million in 2007 (October) with the licensing of four operators. Railcom, a subsidiary of Mongolia Railways, owns a fibre optic infrastructure along railway routes (approx.1,400km), that provides affordable bandwidth for both governmental and private customers while increasing returns on state-owned assets and investments. A number of licensed VSAT service providers also provide such value-added services as network management and on-line commercial bank services. The fully liberalised Internet service market serves approximately 320,000 Internet users. The broadcast media plays an important role in Mongolia’s development by providing information to its citizens. Accordingly, the equipment at radio and TV studios is being improved and transmission systems and stations for TV broadcasting upgraded. Mongolia began broadcasting four domestic digital TV channels – one the national and three commercial – throughout Mongolia in the September of 2006. Network and service separation The Mongolian ICT sector’s structure consists of an asset-controlling ICTA and a telecommunications operating company, Mongolia Telecom (MT), which was created in 1995 when the GoM partially privatised the state-owned telecommunications assets. At the time, the bulk of the network’s fixed-assets had been obtained through inter-governmental grants, some of which the GoM was required to maintain in state-ownership. The GoM, with international assistance, decided to separate the ownership of the network’s fixed-assets from their operation. The Post and Telecom Authority (PTA) was created and given ownership of the network assets. Mongolia Telecom, created as the incumbent fixed-line telecommunications operator, leases network assets from the PTA. The GoM subsequently held an international tender to sell shares in MT to a strategic investor. Korea Telecom (KT) won the tender. GoM currently owns about 54 per cent, KT 40 per cent and individuals some six per cent of MT. The GoM’s 2004 Programme for Privatisation calls for further privatisation of its telecommunication assets and further separation of networks and services. The GoM’s policy and objectives are: • Privatise telecom assets, and separate networks (NETCO) and services (SERVCOs); • Obtain a good price for its shares and the sale of its assets; • Enhance competition; • Provide non-discriminatory access to all licensed operators; • Widen the range of telecommunication services available in Mongolia; and, • Extend services as widely as possible across Mongolia. The separation of the near monopoly network elements from services should minimise the primary source of market power and make it easier for new competitors, since they can use the existing network, to enter the market. The NETCO owns the subscriber lines, street boxes, secondary cables, primary cables and the MDF (main distribution frame), which all service companies can access and use based upon the same monetary terms and conditions. From the MDF, a SERVCO may plug its exchange switch into the local loop. If a SERVCO wishes to offer data (ADSL broadband), they install a DSLAM between the switch and the MDF. The DSLAM will split the data from voice signal with voice going to the SERVCO’s switch and data to the SERVCO’s Internet service provider. GoM established the state-owned Information and Communication Network Company (ICNC) – the NETCO, in August 2006. NETCO’s business plan is almost complete. SERVCOs cannot own or operate transmission equipment, and service licence holders cannot own network transmission assets apart from the cellular phone sites specific to their cell licence and spectrum. If MT transformed its business and became a service company, it would compete with others in the sector. The Communications Regulatory Commission of Mongolia needs the authority to regulate all NETCOs, and SERVCOs; these must be required to ensure switches are open at the Soum (village) level and are compatible with company switches at all other locations. Universal Service Obligation Fund (USOF) Access to information, and the development of information and e-services, is crucial for socio-economic development – both for reasons of efficiency and because a network’s value increases exponentially as the number of users increases. Under the government’s Special Fund Law, licensed ICT service providers pay two per cent of their gross revenues to fund nationwide equal access to ICT services. The USOF promotes development by stimulating ICT usage and rural communications. While USOF projects are not always commercially viable, they are very much socially desirable. In many cases, the USOF has almost singularly led growth in the rural sector. USOF implementation concentrates upon ICT usage in rural areas, especially upon Internet access for remote villages, schools and health centres as part of a total solution to improve rural quality of life. The Government and the private sector have to work together to bridge the digital divide that separates urban and rural areas. Universal access (UA) programmes that offer efficient, low-cost solutions to the country’s needs – and will over time lead to the commercial viability of the services involved – should be given priority. The Mongolian Government plans to introduce two types of Universal Service: first, an obligation to provide service to all customers willing to pay regulated rates – possibly limited to urban areas and rural areas above a given population; and, second, an obligation to extend designated services to a specified number of subscribers or localities. Universal access policies and policy frameworks must be reviewed periodically to ensure they remain suited to their purpose, and ensure that processes do not become rigid and institutionalised or obstruct the flow of benefits they were designed to deliver. Mongolia must also continually adapt its universal access, service policies and programmes to changing resource availability, demand and technological circumstances. Public Private Partnership issues PPPs (public private partnerships) are new in Mongolia’s ICT sector, but well known in its mining, road and transportation sectors. The GoM, especially the ICTA, believes the best approach to developing the national ICT infrastructure is through appropriate partnerships with local and international private investors. The GoM is implementing an Information and Communications Infrastructure Development (ICID) project funded by the World Bank. The wide-ranging scope of this project covers communications regulatory issues, ICT infrastructure in rural areas, PPP for e-government, and enhancing national information security, among others. By using PPPs in Mongolia, the government can support private sector investments in rural infrastructure development projects without overlapping investment. When the public and private sector share project risks and investments the government, private investors and the public all benefit. As ICT sector PPPs are new, ICTA and World Bank consultants are preparing a public-awareness programme and a PPP manual with guidelines for every aspect of PPPs. In addition, a special law is being drafted to clarify the legal environment for PPP ICT procurement. The ICTA and World Bank are also launching a pilot project to showcase the ICID project and promote interest in PPPs. Showcase projects will also provide the content and security infrastructure for national level e-government initiatives. There are projects currently planned for: • Public key infrastructure; • Integrated government administrative and representative portals; • Intellectual property management system; and, • others. The challenge is to address the issues of rural ICT development, privatisation and separation, and expanding the role of PPPs. Although ICT development has a significant impact on almost every sphere of life, infrastructure does not deterministically lead to economic growth. However, few question the contribution of ICT to economic and social development or its potential to transform developing countries into modern and knowledge-based societies. Mongolia’s economy is in transition. Mongolia is now dealing with privatisation, social issues, PPPs, USOF and policy and regulatory issues. The government and the private sector must work together to address these issues. ICTs are changing the course of industrial and economic history; to keep pace and not fall behind, Mongolia and other developing countries must equip themselves with better information technology and implement appropriate policies.
