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Bhutan - Telecoms, Mobile and Internet

  • September 2014
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 29 pages

While mobile internet is booming in Bhutan overall mobile growth has started to slow

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%. Most significantly the mobile networks have provided a major boost to internet access in the country, largely on the back of EDGE/GPRS and 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 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 also 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 internet subscriber penetration was still below 3% in 2013; however, this was compensated by a new booming mobile internet/broadband market.
Note: there are some conflicting statistics published for the Bhutan market; BuddeComm has applied estimates where this problem is encountered.

Market highlights:

Bhutan's telecom sector continues to develop
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 eased considerably over the last few years;
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 have eased downwards over the last few years;
B-Mobile launched a 4G/LTE service in the capital Thimphu in late 2013;
Fixed internet penetration continues to be disconcertingly low with fixed subscriber penetration still below 4% in 2014; however, this was compensated by a new booming mobile internet/broadband market with a penetration of around 30%;
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 - 2014
Category | 2012 | 2013 | 2014 (e)
Fixed-line services:
Total number of subscribers | 27,000 | 26,500 | 26,000
Internet:
Total number of fixed internet subscribers | 17,100 | 20,100 | 23,000
Mobile services:
Total number of subscribers | 560,900 | 544,300 | 530,000
(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;
Infrastructure;
Mobile market;
Internet market.

Table Of Contents

Bhutan - Telecoms, Mobile and Internet
1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
4. Telecommunications market
4.1 Overview of Bhutan's telecom market
5. Regulatory environment
5.1 Bhutan Telecommunications Act 1999
5.2 Bhutan Information Communications and Media (BICM) Act 2006
5.3 Licensing
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 Fixed-line statistics
7.1.3 Universal Service Fund (USF)
7.1.4 Rural communications programs
7.1.5 Very Small Aperture Terminals (VSATs)
7.1.6 E-Shabtog
7.1.7 National optical fibre network
7.1.8 Remote communities
7.2 International infrastructure
8. Internet market
8.1 Overview
8.1.1 Internet and broadband statistics
8.1.2 Government online
8.2 ISP market
8.2.1 DrukNet
8.2.2 Samden Tech
9. Mobile communications
9.1 Overview of Bhutan's mobile market
9.1.1 Mobile statistics
9.2 Regulatory issues
9.2.1 Second mobile licence
9.3 Major mobile operators
9.3.1 B-Mobile
9.3.2 Tashi InfoComm
9.4 3G mobile services
9.5 4G / LTE mobile services
10. Related reports
Table 1 Country statistics Bhutan 2014
Table 2 Telecom revenue and investment statistics 2012
Table 3 Telephone network statistics 2013
Table 4 Internet user statistics 2013
Table 5 Broadband statistics 2013
Table 6 Mobile statistics 2013
Table 7 National telecommunications authorities
Table 8 Bhutan's GDP real growth rate 2006 - 2015
Table 9 Fixed lines in service and teledensity 1995 - 2014
Table 10 Internet users and penetration rate 1999 - 2014
Table 11 Fixed internet subscribers 2003 - 2013
Table 12 Total internet subscribers 2003 - 2013
Table 13 Dial-up internet subscribers 2001 2008; 2010 - 2013
Table 14 Fixed broadband internet subscribers 2008 - 2014
Table 15 DSL broadband internet subscribers 2008 - 2013
Table 16 Internet subscribers by type of access 2008; 2011 - 2013
Table 17 Mobile broadband subscribers 2009 - 2014
Table 18 International internet bandwidth 2000 - 2013
Table 19 Percentage of households with a computer 2002 - 2014
Table 20 Mobile subscribers, annual change and penetration 2003 - 2014
Table 21 Mobile operators, subscribers and annual change 2013
Table 22 Total mobile subscribers and market share by operator 2013
Table 23 B-Mobile's subscribers 2003 - 2013
Table 24 Tashi's mobile subscribers 2010 - 2012
Table 25 B-Mobile's 3G subscribers 2008 - 2013
Chart 1 - Fixed lines in service and teledensity - 2000-2014
Chart 2 - Internet users and penetration rate - 2000-2014
Chart 3 - Mobile subscribers, annual change and penetration - 2005-2014
Chart 4 - Market share by operator 2013
Exhibit 1 Level of competition by market segment
Exhibit 2 Licences issued by service category 2013
Exhibit 3 List of licensed ISPs 2013

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