News, views and commentary from the telecoms sector across emerging markets and developing countries worldwide

Sunday, 21 June 2009

Reaching rural communities in Mongolia

According to a Cellular News report this week, Chinese telecoms equipment vendor ZTE has announced the world's first overlay of a W-CDMA network on an existing CDMA service to realise UMTS/CDMA convergence at the core network level.

The customer is Mongolian CDMA MNO Skytel, a joint venture company established by Mongolian and South Korean investors in 1999, the latter including SK Telecom. While this is a global first in terms of the UMTS/CDMA convergence feature, market-leading GSM MNO MobiCom has already launched 3G services, having launched the country's first high-speed mobile broadband network in the country in April, powered by HSPA technology from Ericsson.

Skytel, which has gone on to carve out a 20.08% share of the Mongolian mobile market (by March 2009, according to WCIS), also competes with Unitel (GSM standard) which has rapidly built a 22.01% market share since commencing operations in June 2006. In terms of eroding the market share of its longer-established competitors, the entry of Unitel has made a much bigger impact on MobiCom than on Skytel.

One more operator makes up the quartet of mobile service providers in Mongolia - G-Mobile, which won a Government tender in 2006 specifically to establish a CDMA service to connect rural Mongolians with the country’s main telephone grid. G-Mobile has since established a market share of just 6.25%.

Although Mongolia has become increasingly urbanised in recent years, with about 40% of the population living in the capital city, and a further 23% living in other towns, a significant minority continue to live in extremely small, remote settlements and on a semi-nomadic basis. As demonstrated by the G-Mobile tender, extending communications services to these people is important for the country's telecoms sector as a whole.

With this in mind, MobiCom signed a three-year managed services contract last year with Altobridge, an Irish company which has developed technology designed to minimise backhaul bandwidth utilisation, thereby making the delivery of mobile communications to small, remote communities a more compelling proposition for MNOs. This deployment won an award earlier this year from the country's leading tech publication and the national Information Communication Technology Authority, who wanted to recognise the positive impact the Altobridge solution is having on communities and enterprises in remote parts of Mongolia. The Altobridge CEO Mike Fitzgerald said at the time of the award that he was delighted that MobiCom had received praise for connecting people still cut off from the benefits of mobile communications. He stressed that this was consistent with a for-profit motive for the operator.

I am always encouraged to read of telecoms solutions improving lives in developing countries. Having met a handful of friendly people from Mongolia's operators at conferences, I'll be interested to see what impact Skytel and MobiCom's recently commenced 3G services have - I'm not yet clear if these services will be aimed purely at higher margin urban customer segments or whether a rural 3G services business case has been calculated.

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