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Bhutan - Telecoms, Mobile and Broadband

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Bhutan - Telecoms, Mobile and Broadband

Bhutan sees 100% mobile broadband growth in boom 12 months

In the last decade Bhutan has moved from having virtually no mobile phones (5% penetration) to claiming around 85% mobile penetration. Over this period the annual growth in mobile subscribers has reached in excess of 100% at times. Most significantly the mobile networks have provided a major boost to internet access in the country, largely on the back of EDGE/GPRS and more recently 3G technology platforms. It was not always like this. Bhutan had been isolated from the rest of the world for a long time both generally, and particularly in terms of its telecommunications. Its mountainous landscape made it especially difficult to build the necessary telecoms infrastructure. Back in 1974, Bhutan and India formally agreed to the introduction of trunk calls between the two countries. However, in a remarkable contrast with the rest of the world, it was not until 1999 that the country saw television stations, satellite dishes and internet services for the first time.

Between 1996 and 2001, Bhutan invested substantially in telecommunications infrastructure. The tiny country quickly developed a modern, fully digital fixed-line network, which covered all 20 provinces and the key commercial and population centres. Despite this investment, however, it experienced significant network performance difficulties in the early stages. In time these problems were largely overcome.

For many years, the offering of mobile services in Bhutan had been considered uneconomical due to its small population, although Bhutan Telecom, the only telecom operator in the country at the time, had considered the Japanese Personal Handy Service (PHS) system as a possible mobile solution. In 2001, as an interim measure, Bhutan Telecom launched a GSM-based mobile satellite service in conjunction with Thuraya Satellite Co Ltd. This service was expected to fill the gap until a conventional national mobile network was established. Then, in 2003, the country's first mobile telephone service was launched. While initially established with relatively limited coverage (five towns including the capital Thimphu), the government was keen to see this service, operated by Bhutan Telecom and branded B-Mobile, providing national coverage by 2006.

In 2006, in what was a landmark step for the local telecom market, the regulator awarded a second national mobile licence to local industrial conglomerate, the Tashi Group, requiring a commercial service to be launched within one year. Tashi eventually began operating its mobile service in 2008. Tashi had managed to claim around 26% of the total mobile subscriber base by 2015, according to BICMA data.

Bhutan also came late to the internet. Development continued down a slow path, as the country embraced online activity cautiously. In fact the internet penetration continues to be disconcertingly low for a country trying to lift itself up economically. Fixed internet subscriber penetration was around 3% in 2015. However, this was compensated by a new booming mobile internet/broadband market; the 2014 year saw mobile broadband services grow by 100%.

Note: there are some conflicting statistics published for the Bhutan market; BuddeComm has applied estimates where this problem is encountered.

Key developments:

Bhutan's telecom sector has been continuing on a steady development path;
Initially driven by positive growth in its mobile market, this has shifted to growth in internet access in its various forms;
The number of mobile subscribers grew strongly for four or five years but growth has eased over the last few years;
The launch of a second mobile operator in 2008 has made the market a competitive one, the competition no doubt helping boost the overall growth rate and reduce tariffs;
With the success of the mobile network, fixed-line subscriber numbers have eased downwards over the last few years;
Fixed internet penetration continues to be disconcertingly low with fixed subscriber penetration sitting around 3% into 2015;
however, this was compensated by a new booming mobile internet/broadband market with a penetration in excess of 30%;
The country has been moving steadily towards a democratic system of government; the hope was that this would start to bring significant structural reform to all sectors of the economy;
Although the telecom regulator has been operating in a progressive fashion since being set up in 2007, the telecom sector remains in need of further reform;
By 2015 there was some action on reviewing and amending the legislation governing the regulation of the telecom/ICT but no timetable had been announced.

Companies mentioned in this report

Bhutan Telecom, B-Mobile, DrukNet, Samden Tech, Tashi InfoComm, TashiCell, Ericsson, Reliance, Airtel.

1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
4. Telecommunications market
4.1 Overview and analysis
5. Regulatory environment
5.1 Bhutan Telecommunications Act 1999
5.2 Bhutan Information Communications and Media (BICM) Act 2006
5.3 BICMA legislation amendment or repeal?
5.4 Licensing
5.4.1 Overview
5.4.2 Second mobile licence
6. Fixed network operator in Bhutan
6.1 Bhutan Telecom
7. Telecommunications infrastructure
7.1 National telecom network
7.1.1 Overview
7.1.2 Bhutan Telecom's infrastructure roll-out
7.1.3 Fixed-line statistics
7.1.4 Universal Service Fund (USF)
7.1.5 Rural communications programs
7.1.6 Very Small Aperture Terminals (VSATs)
7.1.7 National optical fibre network
7.1.8 Remote communities
7.2 International infrastructure
8. Internet market
8.1 Analysis
8.2 Internet and broadband statistics
8.3 e-Services
8.3.1 Proposal to study the licensing of e-services
8.3.2 e-Government
8.3.3 e-Learning
8.3.4 e-Shabtog
8.4 ISP market
8.4.1 DrukNet
8.4.2 Samden Tech
9. Mobile communications
9.1 Overview of Bhutan's mobile market
9.1.1 Mobile statistics
9.2 Major mobile operators
9.2.1 B-Mobile
9.2.2 Tashi InfoComm
9.3 3G mobile services
9.4 4G / LTE mobile services
10. Related reports
Table 1 Country statistics Bhutan 2015
Table 2 Telecom revenue and investment statistics 2013
Table 3 Telephone network statistics 2014
Table 4 Internet user statistics 2014
Table 5 Broadband statistics 2014
Table 6 Mobile statistics 2014
Table 7 National telecommunications authorities
Table 8 Bhutan's GDP real growth rate 2006 - 2016
Table 9 Historical - fixed lines in service and teledensity 1995 - 2005
Table 10 Fixed lines in service and teledensity 2006 - 2015
Table 11 - Historic - Internet users and penetration rate 1999 2009
Table 12 Internet users and penetration rate 2010 - 2015
Table 13 Fixed internet subscribers 2003 - 2014
Table 14 Total internet subscribers 2010 - 2014
Table 15 Dial-up internet subscribers 2001 2008; 2010 - 2014
Table 16 Fixed broadband internet subscribers 2008 - 2014
Table 17 DSL broadband internet subscribers 2008 - 2014
Table 18 Internet subscribers by type of access 2008; 2012 - 2014
Table 19 Mobile broadband subscribers 2009 - 2014
Table 20 International internet bandwidth 2000 - 2015
Table 21 Percentage of households with a computer 2002 - 2015
Table 22 - Historic - Mobile subscribers, annual change and penetration 2003 2009
Table 23 Mobile subscribers, annual change and penetration 2010 - 2015
Table 24 Mobile operators, subscribers and annual change 2014
Table 25 Total mobile subscribers and market share by operator 2014
Table 26 B-Mobile's subscribers 2003 - 2014
Table 27 B-Mobile's 3G subscribers 2008 - 2014
Table 28 Tashi's mobile subscribers 2010 - 2014
Chart 1 - Fixed lines in service and teledensity 2006 - 2015
Chart 2 - Internet users and penetration rate - 2010-2015
Chart 3 - Mobile subscribers, annual change and penetration - 2006-2015
Exhibit 1 Level of competition by market segment
Exhibit 2 Licences issued by service category 2014
Exhibit 3 Licensed ISPs 2014

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