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Development of Bhutan’s Telecom Network

Possibilities for Stimulating Local Participation in the Development of the Bhutanese Telecommunications Network
Wangay Dorji (team leader), CICT, Denmark and Bhutan Communication Authority
Status: The preliminary findings from this research project have been presented at the LIRNEasia Networking Meeting in October 2005 in Jakarta, Indonesia.

The kingdom of Bhutan lies in the eastern Himalayas, sandwiched between the Tibetan Autonomous Region of China in the north and India on other three sides. Bhutan is a mountainous country with a total surface area of 38,394 square kilometers and a population of about 0.732 million (2003). Bhutan�s raw and mountainous terrain has been one of the major hurdles, escalating the cost of providing infrastructures like telephone, electricity and road. Major reforms have been taking place in Bhutan, especially in the telecommunications and other ICT service sectors, for the last few years. An institutional reform has been undertaken within the telecommunications sector. In principle, the functionality of regulation, policy and operations have been segregated from one other with the enactment of the Bhutan Telecommunication Act 1999. As the result of this Act, the once-government owned department of telecom has been transformed into a state-owned corporation and a separate regulatory agency has been created within the ministry. Recently, as an initiative of government restructuring, the former Ministry of Communication has been bifurcated into two separate ministries, namely, Ministry of Information and Communication and Ministry of Work and Human Settlement, in June 2003. The Government of Bhutan sees telecommunications and other ICT services as important and essential catalysts for the over-all development of the country. In order to reap the fruits of ICT for development, a committee consisting of different ICT players, including members from government, private investors, NGOs and donor entities, was established and given the task to discuss and develop a national ICT policy and strategies in 2004. The committee has recognized the importance of the telecommunications infrastructure for the over-all development of ICT related services and it is felt that there is a need to liberalize and introduce competition in the telecommunications market by 2007. Though policy and strategies have been developed for opening the Bhutanese telecommunications market, the actual mechanisms for opening up the market have not yet been formulated. There is no clear indication how competition is to be introduced, which sectors are to be opened and how. Bringing competition in the market will be a major challenge for the government of Bhutan. Firstly, the Bhutan Communication Authority (BCA), regulator for telecommunication, ICT and media sector, is still not independent. BCA still is answerable to the Ministry of Information and Communication for ratification of its decisions. Secondly, there is only weak private participation in the telecommunications market. Lastly, the Foreign Direct Investment Policy of Bhutan does not explicitly address the telecommunications sector, it merely touches the information technology sector. This paper will examine the possibilities for stimulating bottom-up business approaches to encourage local private operators, investors and co-operatives to participate in the telecommunication and other ICT service development in Bhutan in a self-sustaining way. There is an urgent need to analyze and formulate a more detailed policy, as well as regulatory practices, to break-away the traditional method of top-down approaches used for implementing and developing the infrastructures in Bhutan. Bhutan still believes and practices a top-down approach in almost every sector, till date. The Government still decides how and where to provide services without effective consultation with the local people. This study will examine the present practice and explore the possibilities for providing more opportunities to local participation in developing the Bhutanese telecommunications network and ICT sector.

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