Mission Rural Bhutan

Ritu Singh
ritus@cybermedia.co.in

The photograph of an old villager talking over a cell phone is just a marketing gimmick portraying the level of rural penetration of mobile services in any country.

The Bhutan telecommunication industry however has not just limited itself to such hoardings and banners but has indeed been one step ahead in coming out of the shell to make it actually happen in the country. The government and private sector are slowly building networks even in the most remote places, bridging the distance between the kingdom and the world outside.

Come February 2011, and all the gewogs in Bhutan will be connected with mobile cellular communication services. This is what the Bhutan InfoComm and Media Authority dreams of and is doing every bit to complete it the project. BICMA has disbursed Nu 188.4 mn from its Universal Service Fund to the two telecom operators-Bhutan Telecom and Tashi Infocomm-to connect the designated rural and remote areas on a cost-sharing basis. Bhutan currently has only telecom service providers in addition to few ISPs.

Even today, Bhutan's telephone penetration stands at 12.2% in urban areas and a mere 4.9% in rural areas. In the most connected community, Internet connections are present in less than 4% of households with most communities under 1%.

It is generally accepted that access to information and communication technology services is an important component of both social and economic development. So, with this aim of connecting the rural setting of Bhutan truly, the BICMA has taken the initiative to make communication accessible to communities irrespective of their location, and aims to connect all the villages that would not be covered in the first phase of the rural communication project.

The authority strongly believes that investing in the remotest part of the country is a corporate social responsibility for service providers and expects the use of mobile phone reaching new heights in the next 2 or 3 years.

The BICMA and the leading public operator of the country, Bhutan Telecom, signed an agreement on implementing the second phase of Universal Service Program. The agreement was signed on September 29, 2010. Under the second phase of the USP, BTL has taken up the responsibility to connect around 120 villages under 25 gewogs of 8 Dzongkhags (districts). Under the agreements BTL will get a subsidy of Nu 100.6 mn from USF. The total cost of connecting these designated areas is Nu 143.7 mn.

Thinley Dorji, CEO of Bhutan telecom believes that the biggest success of BTL has been reaching mobile services to the much needed rural communities in the kingdom. Despite all the difficulties in terms of establishing network infrastructure in the tough terrain of the country, Bhutan Telecom has managed to connect most of the remote villages and communities some of which are 3-4 days walk away from the nearest motor road.

The telecom major is also in the process of implementing the fiber based NGN transmission network which would cater to common Gigabit backbone for both voice and data. As though 3G was introduced in the capital city of Thimpu but the technology still needs certain addressing before it goes on the roll to the rest of the country.

The kingdom did not churn out much in terms of revenue and growth on the 3G front. The country launched 3G services in 2008 and yet has still not launched it at a pan-Bhutan level. Though it has provided a good alternative particularly when it comes to high-speed data connectivity, but still nothing much has been done at this front.

Jigme Wangdi, head, radio communications, Bhutan InfoComm and Media Authority says, “Though the 3G launch didn't see an overwhelming response, but we are optimistic to see its impact in the future.”

Meanwhile, BTL has also planned an investment of over BTN 2 bn (almost $44 mn) in the networks over the next 4 years.

Bhutan Telecom has announced its plans to use the funds to expand the networks of its B-Mobile subsidiary, besides continuing work to upgrade the Public Switched Telephone Network. Recently B-Mobile completed the expansion projects in the Paro, Samdrupjongkhar, Samtse, Chukha and Haa dzongkhags and it is currently upgrading its GSM network in the rural areas.

Coming to the only private operator in the country Tashi InfoComm, owner of Bhutan's second cellco, it has received Nu 47.1 mn from USF. TashiCell will be constructing base stations, transmission links, and cell towers in the dzongkhags of Darla, Dungana (both situated in Chukha), Nobji, Korpo (Trongsa), Samar (Haa), Bara, and Lherene (the South) with immediate effect.

The private Tashi InfoComm, which expects to connect all 20 dzongkhags by 2011, has reported a subscription base of 73,000, taking 20.5% of the market dominated by the state-run Bhutan Telecom.

According to the Bhutan InfoComm and Media Authority, Royal Government of Bhutan, the kingdom has however experienced a surge in both mobile subscription and Internet services.

Obstacles in the Way

For bridging the digital divide for such a mountainous country that faces basic geographic hurdles for getting telecommunications links, seems to be a herculean deal in itself and hence the choice of correct technology is the main concern for Bhutan.

The first and foremost challenge that the telecom industry is facing in Bhutan's context is the difficult terrain and the scattered nature of human settlements-the high mountains and the sparsely populated settlements scattered throughout the country.

Extending telecom services across the mountains to this scattered customer base makes it very capital intensive while the return on investment is negligible. Some of the radio stations including mobile BTSs need to be located in such difficult to access places due to which infrastructure building as well as maintenance become very expensive. All these factors add up to making the service charges very expensive as compared to the rest of the world.

Moreover, customer base is expected to stagnate as the competitor expands their network coverage through the kingdom.

One of the reasons for the customer base not being up to the mark is the small population size.

Future Prospects

According to the annual Info Comm and Transport Statistics Bulletin 2010 released recently, Bhutan has grown immensely in the field of information and communication technology, telecommunications over the years and is expected to grow further.

The report which is based on data collected in 2009 shows that there were 26,348 fixed-line telephone subscribers by December 2009 after telephone network was first established in 1963.

Mobile phone users reached 327,052 in December 2009 after the services were introduced in the country on November 11, 2003 with Bhutan Telecom as the only operator. It was only in 2006 that the country saw a move towards liberalization in the form of TashiCell grabbing the licence to provide mobile cellular services.

The country has also seen a rise in number of Internet service providers over the years but despite appreciable growth, ICT penetration rate remains low compared to other developing countries.

Just about 0.5 for every hundred inhabitants have Internet connections. By December 2009, there were 145 leased-line Internet subscribers.

Broadband services, however, are becoming popular with the number of subscribers increasing from 1,425 in 2008, when the services were first launched, to about 15,264 at the end of 2009.

Thus, growth in most segments of ICT has been comparable with other developing countries while it is not as much certain in other aspects.

Against 37 mobile subscribers for every 100 people in the Asia Pacific region in 2008, Bhutan had a comparable figure of 34.3 for 100 people. This figure for Bhutan increased to 47.8 in 2009.

To conclude, overcoming the entire geographical and technological obstacles, the country is walking towards setting up a modern infrastructure in the high Himalayas providing a nice connectivity platform.

Though the present condition of telecom industry in the country may be a far cry from other Asian countries, which are experiencing the use of 3G/4G technology and videoconferencing, but it has made a world of difference in many Bhutanese lives.