P. Margad-Erdene, Executive Director, ICN LLC, on the challenges of network extension: Viewpoint

P. Margad-Erdene, Executive Director, ICN LLC

The deployment of the fibre-optic cable network in Mongolia requires a huge amount of investment, as the country has a vast territory and a scattered population. To that end, the government of Mongolia has undertaken several master plans, programmes and projects to develop the ICT sector. The deployment activities for the backbone of the fibre-optic network are progressing step by step, with different funding sources, including foreign aid, loans and the state budget.

The installation of the fibre-optic cable network started in 2002, 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% of soums now have access to broadband internet, as well as public and private e-services.

This network planning was developed in accordance with a ring network concept, as it was seen as the most advanced architecture with which to roll out high bandwidth fibre-optic networks at the time. However, nowadays mesh networks are considered the most reliable network technology due to greater IT usage and higher technical requirements for services and security.

In the vast territory that is Mongolia, there is still an ICT divide between the urbanites and the inhabitants of remote villages, owing to lower levels of usage and higher prices of IT services in rural areas. In keeping with prevailing business practices, these high IT service prices were set according to the large scale of investment made through projects implemented with funding from foreign aid and loans.

In order to eliminate the digital divide between Mongolia’s urban and rural areas, we need to create the kind of technical and economic conditions that will facilitate the introduction of advanced IT services, as well as broadband internet, internet protocol television (IPTV) triple-play services, and 3G and 4G mobile networks in both aimags and soums.

It is important to increase the number of products being transported through the established information highway and decrease the unit cost. This requires a large degree of investment to expand, improve and ensure the operation and maintenance of established networks and achieve economies of scale. Increasing the national transmission network capacity in rural areas would decrease the unit cost.

We plan to undertake technological renovation by connecting aimags and soums with a high bandwidth, intelligent dense wavelength division multiplexing (DWDM) system – the installation of which will increase network reliability by two to three times and boost transmission capacity and bandwidth by 100 Gbps.

Given the steep investment needed and the economic difficulties Mongolia is facing, the state budget is insufficient for such projects. As such, we are committed to solving these investment challenges with sources of funding that do not further burden state resources. Our goal is to boost income from foreign markets and develop broadband internet services locally.

The situation is further complicated by Mongolia’s geographic position as a landlocked country with two giant neighbours. While this is a weakness in one sense, it also has its advantages. For example, ICN LLC created a connection with Russia on the northern border and China to the south through a fibre-optic cable, thereby establishing a high bandwidth broadband network linking Asia and Europe. This gives us the opportunity to generate income from international markets through a range of services, such as transmission of transit networking, international private leased circuits and other services that can also be rendered through the high bandwidth broadband network.

By financing the intelligent DWDM project using the previously referenced incomes, the policy goal of creating affordable IT pricing can be fulfilled, permitting greater internet usage and support for advanced technology deployment in Mongolia’s rural areas. In other words, given the limitations to increasing incomes in local markets, ICN LLC is focused on developing broadband services in the country by undertaking technological renovation to bring prices in line with incomes.

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P. Margad-Erdene

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The Report: Mongolia 2015

Telecoms & IT chapter from The Report: Mongolia 2015

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