Specific regional and poverty reduction impacts in Mongolia

An increasing number of district (soum) centres are within the coverage reach of mobile networks and quickly see significant take-up of up to half of households. Even many district centres not already covered have a few mobile subscribers who make calls only when they are in another district.  

The proposed public access network for nomadic herders is designed to use fixed or semi-fixed VSAT technology rather than mobile networks, because of the country’s immense geographical territory and very low population density. However, field research has demonstrated that the impact of mobile development spills over deep into rural areas and creates demand for both mobile service (in the vicinity of the district centres) and fixed or semi-fixed telephone service further afield. Most herder family members who migrated to the capital for work or study use mobile phones and have created a demand for being in touch with home. Herder families are quite aware of which services are available. The majority have members already travelling regularly into district or provincial centres to make and receive telephone calls. The demand study showed that the number of people making and receiving calls will increase many-fold if a public phone is located close by (within 20 km travelling distance). 

Almost every herder makes long journeys regularly and the majority must travel typically 40 km or more to reach a phone. The public telephony project will more than halve the required travelling distance to 20 km or less. This will provide them with consumer surplus (excess economic benefit from saved time and expense) equal to the cost of using the phone.
Schooling and education have a high priority in rural Mongolia. This creates demand for both family and personal urgent communications. Because of this, there is little doubt that better access to communications will also contribute a significant measure of efficiency to the various social, economic and market development activities of local authorities, development agencies and NGOs in rural areas of the country. 

Other factors that are important in Mongolia are migration decisions that are often taken collectively by several families and after ascertaining weather and grazing conditions in other parts of the province or country.  These decisions can be improved with the help of better access to communications and were mentioned by several respondents in the demand study.

The rural areas’ susceptibility to periodic natural catastrophic conditions, resulting from bad winter weather, creates a demand for more efficient communications to enable more effective response by both herders and local officials. A previous HF radio system, created for the use of local officials, has very mixed and limited usefulness, due to the nature of the technology. An automatic dial network in which a public access phone is available in every settlement area will essentially replace, improve and make the country’s disaster response capability much more effective. The financial and socio-economic impact of communications is almost impossible to measure, but will be significant.

Source: Adapted from Cost-benefit analysis on Mongolia OBA Pilot Program of the Universal Access Strategy, Report submitted to the Global Partnership on Output-based Aid and World Bank, January 2006, Intelecon Research & Consultancy Ltd.

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