Ideas for Today and Tomorrow

Mr. Bayarjavkhlan Tumurbaatar E-mail: bayarjavkhlan@mtcone.net

Fixed telephony market trend in Mongolia

2011

Content

1. Country background2. Economic and Environmental Issues3. Introduction on Mongolia Telecom4. Our Mission5. Mongolia Telecom’s market6. Market share and investment7. Some other figures and facts8. Mongolia Telecom’s Future Trends

Country background

Area 1.566 million square km

Average altitude

1,580 m above sea-level

Population

Chinggis Khan /1162-1227/

The territory of Mongolia is located in the central part of Asia.

Population of Mongolia is approx. 2,7 million as of January 2009.About 40 percent of the population or 1,080,000 live in Ulaanbaatar.

Political President,Great Khural (Parliament-76 seats)

Economic and Environmental Issues

Political system: Parliamentary republic and presidential election is held each 4 years;

Capital city is ULAANBAATAR; State structure: Mongolia is a unitary state and

administratively divided into 21 provinces and a capital city;

Major Industries: Mining (copper and gold), livestock, cashmere; Some notable projects: OYUTOLGOI & TAVANTOLGOI;

About Mongolia Telecom Mongolia Telecom /MT/, established in 1921, is the

biggest shareholding company by its market capitalization on Mongolian Stock Exchange /MSE/.

MT is the largest telecom company at national level, mainly provides local, long distance and international calling service.

MT also provides wide range of service such as fixed line, wireless line, internet, CATV and as well as facsimile and VoIP services.

About Mongolia Telecom MT was privatized and became a state-run

shareholding company in 1995. The government owns 54.6%, Korea Telecom owns 40% and 5.4% is owned by individuals.

Typically, MT’s service and finance are healthful. But compare to the growth of mobile operators, our PSTN provides relatively less service and number of broadband subscriber can’t fulfill our expectation.

It is difficult to meet the challenges of increasingly growing mobile market and to keep an Average revenue per user /ARPU/ at the appropriate level.

Our Mission

To provide customers with high quality and nationwide telecom and internet service,

To protect interest of both its shareholders and the country as well,

To keep pace with a technological development of the world’s telecommunication industry,

To grow efficiency level of dividend for both shareholders and the country,

To step forward simultaneously with customers and employees.

MT’s market

Our service: PSTN – postpaid/prepaid CDMA WLL – prepaid NGN – postpaid/prepaid ADSL and Optical Internet Services – prepaid Cable TV – prepaid VoIP – prepaid Web hosting and cooperate email

Market share

MTC, 89%

Rail-com; 7%

Government, 2% Skynetcom, 2%

Market share of fixed phone, 2009

MTCRailcomGovernmentSkynetcom

Mobicom; 46%

Skytel; 22%

Unitel; 18%

G-mo-bile; 14%

Market share of mobile, 2009

MobicomSkytelUnitelG-mobileMTC, 89%

Mobicom,11%

Market share of WLL, 2009

MTCMobicom

MT is still leading in the fixed phone and WLL market, but Mobicom Corporation has been leading in the mobile market

InvestmentWe have increased amount of investment on the following bases in order to launch internet, WLL and NGN services in the market in recent 4 years.

2009 year 2010 year Plan of 2011

Series1 0.318181818181819 0.413793103448276 0.829268292682927

5.00%

15.00%

25.00%

35.00%

45.00%

55.00%

65.00%

75.00%

85.00%Pe

rcen

t

Increasing number of subscribers-Recently, fixed telephony market is tended grow consistently by focusing on and investing in internet service. However, fixed telephony market had been increasingly shrunk between 2006 and 2009 while mobile market was expanded.

2006 year 2007 year 2008 year 2009 year 2010 year

Per-cent

0.0155826558265582

-0.0381187458305537

-0.04584356

3175343

-0.0646987846717451

-0.00156984651253156

-6.50%

-5.50%

-4.50%

-3.50%

-2.50%

-1.50%

-0.50%

0.50%

1.50%

Perc

ent

Shrinkage of revenue-Although we have experienced some shrinkage of revenue recently, there is a positive tendency of growth in revenue index resulting from increase of investment and stabilization of falling number of subscribers.

2007 year 2008 year 2009 year 2010 year 2011 year

Per-cent

-0.00558659217877078

-0.10674157

3033708

-0.10691823

8993711

-0.0669014084507041

-0.0452830188679245

-11.00%

-9.00%

-7.00%

-5.00%

-3.00%

-1.00%

Perc

ent

Study on MT’s internet user -Daily growth of internet user is making a good result of not decreasing number of fixed telephone subscribers.

1 2 3 4 5 6 7 8 9 10 11 12

Y2009

8,195

8,495

8,760

9,176

9,649

9,846

10,28

0

9,799

9,865

10,85

0

11,65

6

12,90

1

Y2008

2,480

2,287

2,234

2,718

3,259

3,539

4,425

4,571

4,809

5,336

5,788

8,066

Y2010

13,20

6

13,49

8

13,87

0

14,23

2

14,73

7

15,01

4

15,27

9

15,35

7

15,46

9

16,75

0

18,10

8

19,48

0

Y2011

18,98

0

19,74

9

20,16

4

- - - - - - - - -

2,500 7,500

12,500 17,500 22,500

3.7% 3.1% 4.7% 5.2% 2.0% 4.4% -4.7% 0.7% 10.7% 7.4%

10.7%

-7.8% -2.3% 21.7% 19.9% 8.6% 25.0% 3.3% 5.2% 11.0% 8.5%

39.4%

2.40% 2.20% 2.80%

2.60% 3.50% 1.90% 1.80% 0.50% 0.70% 8.3%8.1%

7.60%

-2.60% 4.10% 2.10%

Our short-term goal

To increase and rationally allocate investment To launch 3G service To launch Tri-play service

To launch Fixed and Mobile convergent service

Total use of communication in Mongolia /min/-As we see from index of traffic in mobile and fixed network, a delivery of both mobile and fixed service as a package is able to make a result for fixed operator.

2007 year 2008 year 2009 yearMobile 1250158839 2300119094 2693643688Fixed Phone 725759333 463629890 285725858

250,000,000.00

750,000,000.00

1,250,000,000.00

1,750,000,000.00

2,250,000,000.00

2,750,000,000.00

Axis Title

Comparison of index for main service-It makes number of and revenue from subscribers of fixed telephone which is currently used in the market more stable and gives an advantage to other services of fixed telephone in the result of delivering telecom’s main service and product as the package.

2009 20100

20000

40000

60000

80000

100000

120000

140000

Fixed telephoneADSL internetCDMACATV

Mongolia Telecom’s Future Trends

GSM 3G GPON xDSL WiMax and WiFi Application service Content service E-services

Thanks for your attention!