Mongolia ICT Project: Successes, Failures, and Lessons Learned

The project exceeded its investment goals by 10 times, achieving a value of $395 million compared to the target of $140 million. The private sector's increase in investments was driven by changes in the regulatory environment and government management promoting rural areas. The project also achieved its targets in e- Government services, with two out of three planned services deployed, and increased awareness in the government about technology. Additionally, all soum centers were provided with modern telephone and internet services, exceeding the target of 200 and 100 respectively. Other achievements include a significant increase in publishing regulatory decisions, policy guidelines for public-private partnerships, training of CIOs and ministry personnel, and establishment of a government portal (although this was later cancelled). The project's overall performance was considered satisfactory, despite some delays and failures due to the country's early stage of democracy and lack of cooperation between political parties.

Background - Yingge
Objectives, Results, Implications - Sydney
Success and Failures - Kes
Success and Failure Factors - Kes
Project Management Quality - Yusuf
Lessons Learned - Sydney
Recommendations - Soutcho
Conclusion - Yingge
Background:
Information and Communications Infrastructure Development Project is a full
size, long-term project support by the World Bank, implement by the Government of
Mongolia, Information and Communications Technology Authority (ICTA) and
Communications Regulatory Commission of Mongolia. The project has following key
dates:
For the financial information, the commitment amount is US$ 8.00 million,
the actual total project cost is US$ 11.85 million. The spending of bank financing
include parchment, construction, research, and project management.

Country background:
In past 20 years, Mongolia is in the transit from a socialist country to a free
market democracy county, and has achieved its economic growth with 5% per year to
12.4% from 2004 to 2012. Mongolia is working on improving the telecommunication
infrastructure science mid-1990s, it has an effective liberalization of all market
segments, partially private own fixed line incumbent named Mongolia Telecom
Company (MTC), and an independent regulatory authority Communication
Regulation Commission (CRC). Before the project start, total fixed and mobile tele
density reached 26 percent.
However, there are number of unique challenges Mongolian is facing. It is a
Lockland country located in Northeast Asia, with 1,564,116 km2 of land, but only has
2.8 million of population, approximately 1.76/km2, it is one of the most sparsely
populated countries in the world. In addition, significant share of the country’s 2.8
million citizens having nomadic lifestyle as herders, the rest are reside in settlements
and cities. The extreme low population density and high population flowing in rural
area leading to the high cost to offering service. The result is 80% of telecom service
are offering in urban and suburban, such as Ulaanbaatar, the Aimag capitals, also
some commercial centers like Erdenet. This area has 80% of existing phone and

internet service. And in rural area, tele-density is only 1 present. Tradition approach is
expand and develop the state-owned telecommunications network through public
investment. Other than demographic reason, insufficient capacity to proactively
regulate and improve the development and implementation of an increasing
telecommunication sector agenda. In order to consolidate reforms and address
convergence after the first phase of telecommunication sector reforms, the regulator
have to build institutional capacity.
Despite there are challenges existing, but the policy from Government of
Mongolia are supporting the development of ICT sector. GOM considers these actions
important to address its Economic Growth Support and Poverty Reduction Strategy
which aims to accelerate pro-poor growth and reduce poverty through an approach
that includes improving the environment for private sector led development and
enhancing regional and rural development.
PDO Indicators and Success/Failure Factors
I. The Mongolian ICT project increased its number of telephone minutes to 56.5
million minutes from 1.2 million minutes, which was much higher than the target of 2.7
million minutes. This surpassed the target value by over 2,000%. This was due to a few
factors. First, there was a much higher demand then was expected and many more citizens
of Mongolia desired telephone services. Second, due to new regulatory changes that helped
spur investment the private sector invested more in the bandwidth allowing for a much
higher number of citizens using the service.
II. The project increased the number of soum centers with around 1,000 or more
residents who had internet access from 300 to 12,000, this was higher than the 11,000
estimate. Overall, this was due to the project picking a manageable scope and following
through with the project’s goals.

III. The herder network did not mead its goals increasing the number of minutes
to 530,000 from 0 before the project. The target value was 1,200,000 minutes. The factor
leading to the failure of the herder network was actually a success of the overall project. The
herders failed to use the network due to the availability of higher speed mobile networks in
their area. If the project managers had properly forecasting how successful the rollout was
of the high speed mobile networks, they could have put less resources into the dedicated
herder networks thus reducing costs.
IV. Investment in the ICT sector goals were far surpassed going from 37.6 million to
395 million, up from a target of 140 million. This was mostly because there was a large
increase in private sector investments, which were mainly due to changes in the regulatory
environment that allowed the private equity sector to more profitably invest in ICT
infrastructure. Furthermore, another key factor to the success of this investment was the
promoting that management gave to rural areas, which drew the attention of private
investments.
V. The project completed two of the three e-Government services that were
planned. There was one service previously deployed bringing the current count of e-
Government services up to three. Being that they didn’t develop all three they missed the
target value of four by one. This was mainly because awareness in the government about
technology wasn’t high enough. The project management team rose awareness significantly
through awareness training and changing the political environment
VI. Project management got every ministry to accept the private-public
partnership(PPP) model for e-Government services. The achieved their target value of ten,
which was up from one ministry prior to the projects inception. They did this by education
key individuals in the ministries on the benefits of the PPP model and further enabling the
environment through general awareness of its benefits.

VII. The project got all soum centers (360) to have modern telephone series and
internet services. Their target for each was significantly lower at 200 and 100 for telephone
and internet services, respectively. This was achieved due to the huge successes of other
objectives such as investment gains from the private sector and policy changes that enabled
the expansive rollout.
VIII. The publishing of regulatory decisions was significantly increased achieving the
target value of 100%. This was up from a previous value of 58% of publishing. Awareness
training and seminars hosted by the project was the key success factor in allowing this new
improvement.
IX. Policy guidelines of the public-private partnership were all passed by the
Mongolian movement. This was due to the project management team adequately managing
and leveraging their political capital.
X. The project trained 255 CIO’s of the ministries in the new ICT series and e-
Government services. This was up from a target value of 70. Prior to the project zero CIO’s
had been trained. The officers were trained no matter where they were stationed even
those stationed outside of Mongolia received adequate training on the new systems. This
success was due to the addition of the capacity building subcomponent by project
management. They did an excellent job at management the scope of the project and
allocating the proper amount of resources to exceed the capacity for this objective.
XI. The establishment of Government Portal was completely cancelled and should
be considered a complete failure for the project. The failure factor, however, was not due to
poor management of the project, but rather poor political risk mitigation. The project
management team should have understood that the political system in Mongolia was still
very underdeveloped and changes in power could lead to these drastic shifts in policy. The
team should have attempted to complete the portal prior to the election cycle or adequately
lobbied the opposition party to allow the project to stay on track.

XII. The project trained a significant higher number of ministry personnel in the new
public-private partnership (PPP). The project trained 85 personnel, which was up from the
target of 10 and up from one prior to the project. This success was also due to the addition
of the capacity building subcomponent (please reference X).
Conclusion
1.0 Project management quality was satisfactory
The project management are considering as satisfactory because its overall
performing are good, but has some failures. By the end of the project, its Project
Development Objective (PDO) indicators are mostly has been achieved. Some of are
greatly surpassed that expectation. i.e. The annual telephony minutes in soum centers
reached 56.5 million minutes, which is 20 times than original goal. Additional, it
significantly increased the ICT services coverage and the usage in rural soum. From
only about 100 rural soum in 2006 to all the soum in Mongolia, now all the country
are covered by the internet and telecom services. To accomplish above goals, it was
contributed by the well performance of borrower, direct money support from World
Bank and USOF.
Despite the great success, it has failures such as delay and didn’t reach some
of PDO indicators, such failure mostly due to unable recognize the political risks, and
didn’t identity the stakeholder’s interest. The project was existing from 2006 to 2013,
which has two government election during this period. Due to Mongolia still in the
early stage of democracy process, the two parties are lack of cooperate and some of
policy or focus will change after the new government leader Inauguration. After the
election, the new government modified the e-government component, which change
the original scope, this change directly affect the closing date and delay one year from

March 31, 2012 to March 31, 2013. They delay is in order to implement the two e-
Government applications (PKI & CA and Portal System or Public Key Infrastructure
and Certification Authority). Also the legislation has been affected. Passage of
Concessions Law has been delayed for 2 years, although the feasibility study output
has carried out by March 2007. Which means that the lack of a legal basis for the
operation of e-government services under PPPOE is considered risky by certain
parties.
2.0 Successful project closeout
2.1 Poverty Impacts, Gender Aspects, and Social Development
2.2 Institutional Change/Strengthening
3.1 The private sector cooperate performing a significant role in government dominated
industry. The rural population through an incentive program designed to encourage the
participation of private operators in the rural segment of the ICT market.
3.2 The theology foresight