ICT sector Tariff Policy in Mongolia

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Tariff Policy in Mongolia …

Tariff Policy in Mongolia
URANZAYA ERDENECHULUUN
Space and Radio Communications Division
Information Technology, Post and Telecommunications Authority

Information Technology, Post and Telecommunications
Authority is in charge of formulating the law, regulation and
development policies in the ICT development matter.


Communications Regulatory Commission /CRC/ shall
work with functions to develop effective and fair competition
environment for market participants issue licenses, work out
professional conclusions and decisions. (Law on
Communication)



ITU Regional Seminar on Costs and Tariffs for SG3RG-AO
Tokyo, Japan
8-9 April, 2013

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  • 1. Tariff Policy in Mongolia URANZAYA ERDENECHULUUN Space and Radio Communications Division Information Technology, Post and Telecommunications Authority ITU Regional Seminar on Costs and Tariffs for SG3RG-AO Tokyo, Japan 8-9 April, 2013
  • 2. 2 Content . • Country overview /brief/1 • Policy and Regulatory Authorities2 • Sector Overview3 • Traffic Policy and Regulation Development4
  • 3. 3 Country Overview Location: Northern Asia, between China and Russia. Capital: Ulaanbaatar (population approx. 800,000) Terittory: 1,566,500 sq.km Population: 2.8 mln Climate: Average summer temperature +20oC, average winter temperature - 26oC. Natural resources: Oil, coal, copper, molybdenum, tungsten, phosphates, tin, nickel, zinc, fluorspar, gold, silver, iron Language: Mongolian. GDP (US$ bn): 9.9 GDP per capita (US$): 3,509 GDP by sectors: agriculture: 18.1%, industry: 36.2%, services: 45.7% (2011 estimate)
  • 4. Content 4 • Country overview /brief/1 • Policy and Regulatory Authorities2 • Sector Overview3 • Traffic Policy and Regulation Development4
  • 5. 5 Policy and Regulatory Authorities Information Technology, Post and Telecommunications Authority is in charge of formulating the law, regulation and development policies in the ICT development matter. Communications Regulatory Commission /CRC/ shall work with functions to develop effective and fair competition environment for market participants issue licenses, work out professional conclusions and decisions. (Law on Communication)
  • 6. 6 Content . • Country overview /brief/1 • Policy and Regulatory Authorities2 • Sector Overview3 • Traffic Policy and Regulation Development4
  • 7. 7 ICT Sector Statistics Source: Communications Regulatory Commission website 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 2007 2008 2009 2010 2011 Number of mobile subscribers
  • 8. ICT Sector Statistics . 8 - 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 2006 2007 2008 2009 2010 2011 2012.06.30 Mobicom LLC Skytel LLC Unitel LLC G-Mobile LLC Market shares of mobile operators Source: Communications Regulatory Commission website
  • 9. ICT Sector Statistics Number of mobile subscribers by technology 9 - 500,000.00 1,000,000.00 1,500,000.00 2,000,000.00 2,500,000.00 2007 2008 2009 2010 2011 2012.06.30 GSM CDMA 3G Source: Communications Regulatory Commission website
  • 10. ICT Sector Statistics Number of immovable telephone subscriber . 10 176000 178000 180000 182000 184000 186000 188000 190000 192000 194000 196000 2008 2009 2010 2011 2012.06.30
  • 11. ICT Sector Statistics . 11 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 2007 2008 2009 2010 2011 Total number of internet subscribers
  • 12. 12 Content . • Country overview /brief/1 • Policy and Regulatory Authorities2 • Sector Overview3 • Traffic Policy and Regulation Development4
  • 13. Environment - Law on Communication (1995) - Established Regulatory council - Separate network from service - Privatization - Sector reform - Separate business from policy - Ministry of Transportation And Communication - Ministry of Communications handles policy and service 1995- 2000 1993- 1994 1992 Before 1992 Market - Communications asset company (NetCo) ₋ Mongolia Telecom Company (MTC) ₋ Mobicom,1st mobile operator (1995) ₋ Skytel, 2nd mobile operator (1999) ₋ From analogue to Digital ₋ Separate TV, Broadcast from Communications company ₋ Established Mongol Post Company ₋ Datacom LLC- 1st ISP ₋ Established Communications company (TV, broadcast, post, telecom) No competition Traffic regulation - Competition enhanced in the Telecom market ₋ Government decides traffic of Leased circuit, leased duct, ₋ Interconnection charge required ₋ Interconnection charge still based or revenue sharing ₋ Cross subsidy tariff system ₋ Tariff were still strictly under control - Telecom sector tariffs were strictly under control Timeline of ICT Sector Development and Tariff Regulation
  • 14. Environment - Universal system/Universal access policy - Sharpening competition in mobile market - Renew Law on Communication (2001) - Establish CRC (2002) - Establish ICTPA (2004) - Liberalization - Sector restructuring 2007- Present 2001- 2006 Market - 3rd (Unitel) 4th (G-mobile) mobile operators entered into the market - 3G license to mobile operators - Local VOIP service providers - International VOIP - Designating dominant operators in 2003 (MTC, Mobicom) Traffic regulation ₋ Non geographic tariff ₋ Cost based Interconnection rate between operators ₋ CRC set Interconnection rate in 2010 ₋ Decrease leased circuit tariff ₋ High tariff for mobile service ₋ High Leased line tariff ₋ Requirement for change of tariff regulation regime to go in line with market mechanism ₋ Control dominant tariff ₋ Increase local call tariff ₋ Tariff rebalancing ₋ Set international settlement rate and local termination rate for int’l call Timeline of ICT Sector Development and Tariff Regulation
  • 15. 15 Policy and Regulation on Tariff Legislation Power of ITPTA “…… to elaborate policy on Communications to formulate policy on creation of competition in communications market; Power of CRC “ ……. to approve accounting methodologies for service tariffs, monitor service tariffs dominating a market; to approve general terms of interconnection agreements between networks and procedures of revenue distribution;  Methodology for setting up tariff for communications’ services  Procedure on determination of and imposing a control over a dominant operator  General procedure for interconnection  Procedure on service charges of interconnection Regulatory documents
  • 16. 16 METHODOLOGY FOR SETTING UP TARIFF FOR COMMUNICATIONS’ SERVICES /by CRC/ Tariff setting shall apply accordingly a principles accepted by ITU recommendations and World Economic and Co-operations Organization, World Trade Organization’s methodologies: a. Cost based principle b. Price cap principle c. Principle of benchmarking PROCEDURE ON THE CONTROL ON THE BASICS OF SERVICE TARIFF /by CRC/ The Dominant operator and new service providers, in order of their service tariff basics being checked shall submit to the CRC along with the price quotation the related materials 45 days prior to the launch of the service. Retail Tariff Regulation
  • 17. 17 Wholesale Tariff Regulation GENERAL PROCEDURE ON INTERCONNECTION /ITPTA/ - Non-discrimination, transparency and sustainability principles - Cost-based and co-efficient. - Any inefficiency should not be passed through interconnection or access charges. PROCEDURE ON SERVICE CHARGES OF INTERCONNECTION /CRC/ - Cost should be calculated by the principles and methodologies stipulated in of ITU recommendations and COSITU model or the international accounting standards. - The parties within 21 days prior to the signing the agreement shall submit to the CRC commonly agreed the final proposal on the charges for interconnection or each parties’ separate proposals alone with their basics, if the common agreement had not been reached.
  • 18. Addressing Market Dominance Competition Law - Dominance exists when a single business entity acting alone, or a group of business entities acting together, account for over one third of the sales of certain kind of products in the market. 18 Regulate Relax Monopoly Dominant 33% The CRC shall annually determine and announce to the public on the dominant operators within the communications market.
  • 19. Addressing Market Dominance Services Indicators 1. International telephone calls service Minutes 2. Fixed telephone services End users, others 3. Mobile telephone service Number of customers, others 4. Wireless telephony package services End users, others 5. Mobile satellite services End users, others 6. CaTV services Number of customers, others 7. Internet services Number of customers, others 8. Leased circuits services Number of leased circuits, capacity 9. International registered and ordinary Number of parcels and mails, others postal 10. Local and domestic postal services Number of parcels and mails, others 19
  • 20. Regulation fee and interconnection tariffs /CRC/ Non-dominant tariffs must be reviewed within 14- 21 business days and contentious dominant tariffs reviewed within 14-21 business days respectively. The CRC approved the minimum rates of external billings for international incoming calls and termination rates of international calls at mobile, wireless and fixed networks. The CRC also adopted a cost accounting model by investigating economic efficiencies of a service cost and service packages on the basis of service costs of Mongol Post Company. 20
  • 21. Regulation fee and interconnection tariffs /CRC/ Difference between domestic and local communication service fee has been changed to same tariff. -domestic mobile subscribers interconnection tariff reduced an average of 1.7-2.1 times, -domestic fixed subscribers interconnection tariff an average of 1.6-2 times. Domestic channel lease tariff for internet service is regulated by CRC. -internet subscriber’s monthly payment reduced by 15% in average and enables to increase internet connection speed of customers 21
  • 22. 22 Thank you for your attention.