Overview Information and Communication Technology Sector in Mongolia

Introduction

Information technology is the fastest growing sector in Mongolia. In 2006, the Government launched a program intended to provide a computer for every household in the country. Part of this program involved eliminating the import tax on computers so that families could afford to buy high-quality hardware at a reasonable price.

As of May 2016, there are 695 special requirements conducted, 1,962,149 internet users across the country. The installation of the fibre-optic cable network started in 20028 with 17,000 km of high-speed fibre and transmission facilities covering 279 soums (districts) and 21 aimags (provinces) already deployed. As a result of these efforts, 90 percent of soums now have access to broadband internet.  In the 2016 the ICT sector has employed 11,322 staffs.

The government recognizes the important role of the private sector and expresses their support in the following interventions: use ICT for increasing the competitiveness of national industry and services, support start-up businesses in ICT, activate domestic ICT market by promoting and intensifying ICT consumption by the government.

References:
Communications Regulatory Commission of Mongolia
http://www.crc.gov.mn/
Information, Technology Post and Telecommunications Authority 
http://www.ict.mn 
Mongolian Information Development Association (MIDAS)
The National Information Technology Park (NITP)
http://itpark.mn/

Thriving Telecoms and IT Sector

With the fast growth of ICT`s total revenue each year, new interest from foreign investors will develop higher-speed network and build competitive network to global markets. Since it was liberalized in the early 1990’s, Mongolia’s telecommunication sector has grown rapidly.

The sector has the potential to attract a considerable amount of FDI, to facilitate new activity, faster and better services. With the high mobile penetration rate, subscriber growth is widely expected to slow or plateau in the coming years.

The government has taken on a key role in this area, introducing a number of large-scale, long-term development plans aimed at ensuring steady improvements in both the reach and the quality of national telecoms networks. The government is fully behind the blossoming IT industry. In 2018, it launched the Hub Innovation Center, the nation’s first facility that directly supports startups.

Interesting fact in Mongolia: 2.6 million Internet users
2.5 million Facebook users

Telecommunications

Fixed-line telecoms services in Mongolia were provided solely by the government until the fall of the Soviet Union in 1989. Since it was liberalized in the early 1990s, Mongolia’s telecommunications sector gas grown rapidly. As of the first half of 2016 the four major mobile operators Mobicom, Unitel, Skytel and G-Mobile reported more than 469 million subscribers in total, according to the country’s telecoms regulatory agency CRCM.

The following laws are directly applicable to telecom operations:

Laws and regulations:

  • Telecommunication Law
  • Establish, utilize, protect telecom networks
  • Monitor telecom business activities
  • Define rights and responsibilities of service providers and users
  • Law on Radio Frequency
  • Distribute, utilize, protect proprietorship and ownership of radio frequencies
  • Authorize and monitor radio frequency related issues
  • Define rights concerning Mongolian satellite connections
  • Business Licensing Law
  • Grants licenses for the following service areas (non comprehensive list): PSTN,
  • Transmission, WLL, Mobile, Internet ISP, VoIP, Datacom (WAN), International
  • gateway, CATV and terrestrial broadcast, Radio and Television
  • License fees for international gateway operations cost 50,000 USD
  • Electronic Signatures Law
  • Mongolian Sustainable Development Vision 2030
  • Develop Telecommunications Strategy 2017-2025
  • National Satellite Program

License Application Requirements

License applications shall be in accordance with the following procedure

  • The application shall be filed and submitted to the Communication Regulatory Commission –CRC
  • It shall contain a description of accounting, finance and economical figures for the applicant and his technical and professional capabilities
  • In addition existing business activities shall be described
  • The applicant is entitled to have a preliminary response within 7 calendar days, and a formal approval or denial within one calendar month after submittal
  • The applicant must be a registered company of Mongolia

Request and consideration of the approval:

  • A legal entity of this Law shall make its application for authorization to the state central administrative body in charge of investment affairs directly or through a representative office and authorized representative in Mongolia and shall attach the following documents to the application:
  • A notarized copy of the certificate of incorporation of the applicant issued by a competent authority of the applicant’s country
  • References of the registration authority concerning the applicant, the persons with common interest with it, the applicant’s executive management
  • The preliminary transaction between foreign state owned entity and Mongolian entity, its type and conditions, the transaction parties, shares to be transferred, percentage of shareholding, agreement price, the charter of the legal entity, if it is agreed to make changes to management it shall be notified as well;
  • Financial statements and clarifications to financial statements of the foreign state owned legal entity and the Mongolian business entity;
  • The investment plan and business project to be implemented by the applicant in Mongolia.

Market share of mobile subscribers

Company 2015 2016
Mobicom 41.81% 39.21%
Skytel 16.00% 16.00%
G-Mоbile         12.33% 13.11%
Unitel 30.87% 31.68%

Investment Opportunities

Foreign investors should look into investing in ICT companies or outsourcing their software development needs

The following businesses provide the most potential for foreign Investors:

  • Mobile services
  • Software outsourcing
  • Telecom access infrastructure on CATV coaxial cables o IRU based transit
  • Electronic production of hardcopy books and documents
  • Telehouses
  • WEB and WAP services
  • Teletext services

National Development Agency’s team is happy to
help you via its complimentary e-Consulting service.