Due to its unique characteristics, Mongolia faces very specific challenges in the telecommunications area. As the least densely populated country in the world, and with a significant portion of the population living a nomadic lifestyle, it has been difficult for many traditional information and communication technology (ICT) companies to make headway into Mongolian society.
The Internet penetration rate was 68% by the end of 2019. With almost half the population clustered in the capital of Ulaanbaatar, most landline technologies are deployed there. Wireless technologies have had greater success in rural areas. A fiber-optic network has been installed that is improving broadband and communication services between major urban centers with multiple companies providing inter-city fiber-optic cable services.
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. The telecommunications network is improving with international direct dialing available in many areas. A fiber-optic network has been installed that is improving broadband and communication services between major urban centers with multiple companies providing inter-city fiber-optic cable services.
Foreign direct investment in Mongolia’s extractive industries – which are based on extensive deposits of copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten – has transformed Mongolia’s landlocked economy from its traditional dependence on herding and agriculture. Exports now account for more than 40% of GDP. Mongolia depends on China for more than 60% of its external trade. Mongolia also relies on Russia for 90% of its energy supplies, leaving it vulnerable to price increases. Remittances from Mongolians working abroad, particularly in South Korea, are significant.
The current government has made restoring investor trust and reviving the economy its top priority, but has failed to invigorate the economy in the face of the large dropoff in foreign direct investment, mounting external debt, and a sizeable budget deficit. However, Mongolia reached staff-level agreement with the IMF in February 2017 on an Extended Fund Facility program, which is improving Mongolia’s long-term fiscal and economic stability.
The Mongolia Telecom Company (MTC) is a joint venture with Korea Telecom (KT) and partially publicly owned. MTC leases fiber-optic lines from the Mongolian Railway Authority and connects to all provinces and districts in the country. Its services include international telephone service, long distance and local telephone services, facsimile service, leased circuits, telegraph service, TV and radio broadcasting service, public card payphones, Internet service, prepaid phone and prepaid card service, and wireless local loop system’s service.
The Mongolian government is building a data center in Ulaanbaatur to house the government’s IT systems and Internet infrastructure. KT Corporation, a leading South Korean internet provider, has been hired to build the new government facility.