1. Ideas for Today and Tomorrow Mr. Bayarjavkhlan Tumurbaatar E-mail: bayarjavkhlan@mtcone.netbayarjavkhlan@mtcone.net Fixed telephony market trend in Mongolia 2011

2. Content 1.Country background 2.Economic and Environmental Issues 3.Introduction on Mongolia Telecom 4.Our Mission 5.Mongolia Telecom’s market 6.Market share and investment 7.Some other figures and facts 8.Mongolia Telecom’s Future Trends

3. Country background 1.566 million square km 1,580 m above sea-level 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. President, Great Khural (Parliament-76 seats)

4. 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;

5. 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.

6. 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.

7. 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.

8. 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

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

10. Investment We 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.

11. 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.

12. 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.

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

14. 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

15. 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.

16. 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.

17. Mongolia Telecom’s Future Trends GSM 3G GPON xDSL WiMax and WiFi Application service Content service E-services