A Global Partnership on Output-Based Aid (GPOBA)-funded pilot project in
Mongolia provided access to modern information and communication technology (ICT) services to over 22,300 herders living in remote, sparsely populated, rural areas of Mongolia. The services have reduced communication costs for these
herders, strengthened family ties, improved security and coordination associated with migration and response to harsh weather, increased economic activity, and contributed to more efficient governance and provision of social services.

Mongolia, almost half the size of India, is the world’s least densely populated country: 2.8 million people live across 1.5 million square kilometers. Because of the country’s vast and challenging geography, the cost of providing rural communications infrastructure is high. Before the World Bank and GPOBA helped to develop and fund Mongolia’s rural communication access program, most of the country’s ICT infrastructure in rural areas was government owned and controlled, and there was only limited access to poor quality services in rural areas. Private mobile operators were not mandated to provide services to rural areas, which appeared to be commercially unviable. The lack of ICT services affected the rural population in multiple ways, limiting social communication and access to information and education media, and delaying response times in emergencies.

To give Mongolians access to modern ICT services, the World Bank supported the development of the government’s Universal Access policy. This included establishing a fund to provide subsidies for the expansion of ICT services into rural areas. The subsequent Mongolia Universal Access Pilot Project, signed in 2006 and completed in 2010, was one of GPOBA’s first grant agreements.

In line with the output-based aid (OBA) approach, GPOBA subsidies were paid to service providers only after the services (or “outputs”) were delivered and verified by an independent expert. The GPOBA-funded pilot was followed by a full scale roll-out financed by the World Banks’ International Development Association (IDA) and the Universal Service Obligation Fund of Mongolia.

The World Bank and GPOBA helped Mongolia’s Communications Regulatory Commission to manage and finance several “least-cost” subsidy competitions. The recipients of subsidies were private operators responsible for installing and operating the rural voice and Internet services. This approach harnessed the power of the private sector by providing incentives to deliver services in rural areas.

With the infrastructure and services now in place across the country, many more of Mongolia’s rural residents are able to communicate easily, and benefit from educational and commercial access to the Internet. It also opens a range of opportunities for the government, private sector, civil society organizations, and development partners to enhance service delivery by using new technologies.