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Bhutan - Telecoms, Mobile and Internet

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Mobile broadband services expanding rapidly in Bhutan

In less than seven years Bhutan has moved from having no mobile phones to claiming more than 70% mobile penetration. Over this period the annual growth in mobile subscribers has reached in excess of 100%. 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 has 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 did experience significant network performance difficulties in the early stages.

For many years, the offering of mobile services 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.

Bhutan came late to the internet. Development has continued down a slow path, as the country embraces online activity cautiously. In fact the internet penetration continues to be disconcertingly low for a country trying to lift itself up economically. Fixed subscriber penetration was still below 3% in 2012; however, this was compensated by a new booming mobile internet/broadband market.

Market highlights:

Bhutan’s telecom sector continues to develop, driven by strong growth in its mobile market.

The number of mobile subscribers grew strongly for four or five years but growth has eased considerably over the last few years to be running at around 10% annually.

The launch of a second mobile operator in 2008 made the market a competitive one, the competition no doubt helping boost the overall growth rate.

With the success of the mobile network, fixed-line subscriber numbers had eased downwards over the last few years, but by 2012 the subscriber numbers appeared to have stabilised.

Internet penetration continues to be disconcertingly low with fixed subscriber penetration still below 3% in 2012; however, this was compensated by a new booming mobile internet/broadband market.

The country has been moving steadily towards a democratic system of government with elections being held in 2008; 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.Bhutan – key telecom parameters – 2012 - 2013
Category | 2012 | 2013 (e)
Fixed-line services:
Total number of subscribers | 27,600 | 28,000
Total number of fixed subscribers | 20,000 | 25,000
Mobile services:
Total number of subscribers | 535,000 | 590,000
(Source: BuddeComm)
This report provides an overview of the trends and developments in the telecommunications markets in Bhutan.

Subjects covered include:

Key statistics;
Market and industry overviews;
Major operators (mobile and fixed)
Regulatory environment;
Mobile market;
Internet market.

1. Executive summary
2. Key statistics
2.1 Country overview
2.1.1 Background
2.1.2 Economy
3. Telecommunications market
3.1 Overview of Bhutan’s telecom market
4. Regulatory environment
4.1 Bhutan Telecommunications Act 1999
4.2 Bhutan Information Communications and Media (BICM) Act 2006
4.3 Licensing
5. Fixed network operator in Bhutan
5.1 Bhutan Telecom
6. Telecommunications infrastructure
6.1 National telecom network
6.1.1 Overview
6.1.2 Fixed-line statistics
6.1.3 Universal Service Fund (USF)
6.1.4 Rural communications programs
6.1.5 Very Small Aperture Terminals (VSATs)
6.1.6 E-Shabtog
6.1.7 National optical fibre network
6.1.8 Remote communities
6.2 International infrastructure
7. Internet market
7.1 Overview
7.1.1 Internet statistics
7.1.2 Government online
7.2 ISP market
7.2.1 DrukNet
7.2.2 Samden Tech
8. Mobile communications
8.1 Overview of Bhutan’s mobile market
8.1.1 Mobile statistics
8.2 Regulatory issues
8.2.1 Second mobile licence
8.3 Major mobile operators
8.3.1 B-Mobile
8.3.2 Tashi InfoComm
8.4 Third Generation (3G) mobile
9. Related reports
Table 1 – Country statistics Bhutan – 2012
Table 2 – Telecom revenue and investment statistics – 2010
Table 3 – Telephone network statistics – October 2012
Table 4 – Internet user statistics – 2012
Table 5 – Broadband statistics – 2012
Table 6 – Mobile statistics – October 2012
Table 7 – National telecommunications authorities
Table 8 – Bhutan’s GDP real growth rate – 2006 - 2013
Table 9 – Fixed lines in service and teledensity – 1995 - 2012
Table 10 – Internet users and penetration rate – 1999 - 2013
Table 11 – Fixed internet subscribers – 2003 - 2013
Table 12 – Total internet subscribers – 2003 - 2013
Table 13 – Dial-up internet subscribers – 2001 - 2007
Table 14 – Fixed broadband internet subscribers – 2008 - 2013
Table 15 – DSL broadband internet subscribers – 2008 - 2012
Table 16 – Internet subscribers by type of access – 2008; - 2011
Table 17 – International internet bandwidth – 2000 - 2012
Table 18 – Percentage of households with a computer – 2002 - 2012
Table 19 – Mobile subscribers, annual change and penetration – 2003 - 2013
Table 20 – Mobile operators, subscribers and annual change – October 2012
Table 21 – B-Mobile’s subscribers – 2003 - 2012
Table 22 – Tashi’s mobile subscribers – 2010 - 2012
Table 23 – B-Mobile’s 3G subscribers – 2008 - 2012
Table 24 – Active mobile-broadband subscriptions – 2009 - 2011
Exhibit 1 – Level of competition by market segment
Exhibit 2 – Licences issued by service category – 2012
Exhibit 3 – List of licensed ISPs – 2012

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