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ICT

Thriving Telecoms & IT sector

Overview Information and Communication Technology Sector in Mongolia

Introduction

Mongolian Information and Communication Technology (ICT) sector is thriving, with rising revenue each year. According to the NSO, the total revenue of the telecommunications sector reached MNT 1.7 trillion, an 8 percent increase compared to last year. This increase is largely due to an increase in wireless telecommunications revenue.

Mobile phones are common, with provincial capitals all having 4G access. Wireless local loop is another technology that has helped Mongolia increase accessibility to telecommunications and bypass fixed-line infrastructure. For Internet, Mongolia relies on fiber optic communications with its Chinese and Russian neighbors.

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.

Telecommunications

The number of active mobile phone users reached 4.8 million (double counted) at the end of 2022 according to the NSO. This is an increase of 226.6 thousand users compared to last year. Due to Covid 19, the number of active internet users has increased drastically in 2020. From then, internet users reached 4.18 million (double counted) at the end of 2022 according to the NSO.

Statistics of telecommunications

1. Mobile phone active users 4.8 million
2. 4G users 2,809,592
3. 3G users 3,539,362
4. Data usage 405,468
5 Fiberoptic cable 354,155
6. DSL 13,307
7. Wi-Fi 8,337
8. Wi-Max 3,928

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.

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