The Kingdom of ‘Gross National Happiness’ sees strong growth in mobile phones

In less than seven years Bhutan has moved from having no mobile phones to claiming 60% mobile penetration. Over this period the annual growth in mobile subscribers has reached in excess of 100%, according to Research & Markets.

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 more than US$21 million 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.

India donated a 1000-line C-DOT Telephone Exchange to Bhutan in 2000 as a goodwill gesture. Bhutan had been discussing the possibility of using INSAT (Indian satellite system) for national telecommunications.

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 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.

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