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Telecom Mongolia JSC to be nationalized

GoM to purchase 40 percent stake of Telecom Mongolia at USD 2.55 million

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http://zgm.mn/post/220/


Mongolian Stock Exchange has announced that the 40 percent stake of Telecom Mongolia JSC, MSE Tier II listed firm, will be transferred to the Government of Mongolia in a package deal. KT Corporation, formerly known as Korea Telecom, previously publicized to sell its stake in Telecom Mongolia JSC to the GoM. The company has reached a deal with the GoM to sell its 40 percent stake at USD 2.55 million. Established in 1921, Telecom Mongolia JSC is one of the pioneer companies in Mongolia and provides telecommunications, internet, cable television and directory services nationwide. Presently, 5.33 percent stake of the company is owned by the public, while the Government holds 54.67 percent of the company and South Korean KT corporation owns 40 percent. Altan-Ochir Munkhuu, CEO of Telecom Mongolia JSC, has previously told the media that the company will be fully nationalized this year. After the sale, the Government will own 94.67 percent, while the remaining is publicly owned. The sales revenue of Telecom Mongolia JSC reached MNT 20.7 billion with net profit of MNT 6 million in 2017. Market cap of Telecom Mongolia JSC stands at MNT 12.9 billion. In addition, the stakeholders’ meeting of Telecom Mongolia will be held on April 30 at the Information and Communication Networking Company’s conference hall at 11AM. The meeting is expected to discuss the following:

• 2017 operational report and its board review.

• 2017 financial statement with an independent audit review.

• The selection of ordinary and independent members of the Board.

• Approval of 2018 board budget.

• The Board of Directors' decree on not distributing dividends.

• Write out of an immovable object from asset account.

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Chairman of MNCCI comments on PM’s visit to China

Several projects to commence upon the implementation of mega projects

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According to Lkhagvajav Baatarjav, Chairman of the Board and President of Mongolian National Chamber of Commerce and Industry (MNCCI), Prime Minister Khurelsukh Ukhnaa’s visit to People’s Republic of China (PRC) is significant in terms of both political and economic importance. In other words, it was aimed at expanding trade and economic cooperation between the two countries and increase trade turnover.
During the Mongolia-PRC business forum, both sides concluded USD 4.6 billion worth 36 agreements and memorandums of understanding (MoU), including the establishment of a new Wastewater Treatment Plant in Ulaanbaatar. Another significant project, as Mr. Lkhagvajav highlighted, is New Asia Group’s 100 MWt Thermal Power Plant, which will be built in Telmen Soum, Zavkhan aimag. According to Mr Lkhagvajav, the Chairman of MNCCI comments on PM’s visit to China company plans to launch the project in the middle of next month and is expected to provide electricity in 19 months. “The implementation of major projects will flourish following businesses,” Mr. Lkhagvajav emphasized. For example, USD 200 million worth agreement on establishing an Agricultural Industrial and Technological Park is expected to be established under the New Asia’s Thermal Power Plant in Telmen. He then noted that mining sector will play key role in increasing bilateral trade turnover; however, the bottleneck at border checkpoints is becoming an obstacle for mining export. In order to resolve the issue, the Prime Minister purposely visited the border checkpoints, Gants Mod and Gashuunshukhait. The signed deals and MoUs imply that PRC is highly interested in developing cooperation on renewable energy, tourism, trade, construction, meat and processed meat product spheres. In addition, Mongolia expressed full recognition of Belt and Road initiative of PRC during the visit. Although Mongolia was engaged in the initiative for businesses, it did not express political support for the initiative up until now.

“The Northeast Asia has become the core of economic development. Frankly speaking, Mongolia is becoming the biggest obstacle. Mongolia’s infrastructure, energy supply, judiciary, rule of law, corruption, bureaucracy and negligence of agreements and negotiations have been serving as impediment for the development of Northeast Asia,” highlighted Mr. Lkhagvajav. He added, “There is an anticipation that Mongolia’s economy will grow about six percent in the next two years. The government needs to have fruitful projects that can benefit citizens, companies and economy, and utilize this golden opportunity.” Currently, trades conducted with the PRC account for 63 percent of Mongolia’s total trade turnover. Comparing to statistics of 2016, trade turnover of the two countries grew by 30 percent last year. Trade turnover between the two countries totalled USD 6.7 billion in 2017. Both sides set a goal to increase trade turnover to USD 10 billion by 2020.


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Chinese border checkpoint opens three entry ports for coal transport

Entry capacity of Gantsmod increases after PM's visit

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Authorities of Gashuunsukhait border checkpoint informed that coal trucks are passing through three entry ports in Gantsmod border checkpoint starting from this Monday. Presently, six entry ports are operating for vehicles exiting Mongolia through Gantsmod border checkpoint. In late 2017, Gantsmod border checkpoint reduced the entry ports for coal trucks to two, drastically reducing Mongolia’s exports. Prime Minister Khurelsukh Ukhnaa met with the authorities of Baynnuur city of Inner Mongolian Autonomous Region during his official visit to People’s Republic of China (PRC) and reached an agreement to increase the entry capacity at the border.


Furthermore, sides signed a deal to upgrade Gashuunsukhait-Gantsmod border checkpoints with CNY 148 million non-refundable aid of PRC. The checkpoint is considered the main route for coal export from Tavan Tolgoi residual deposits. Specifically, Erdenes Tavan Tolgoi, Energy Resource and Tavan Tolgoi JSCs are exporting coal to PRC through the checkpoint. Entry capacity at Gashuunsukhait checkpoint is currently 50 seconds per truck, while Gantsmod is 15 seconds according to the Government of Mongolia. In addition, Bayannuur city of Inner Mongolia will independently govern the border checkpoint soon. This will allow direct agreement between the city authorities and Erdenes Tavan Tolgoi JSC on processing 10 million tons of coal. Accordingly, the authorities of Bayannuur city informed that necessary infrastructure and electricity grid have been established in the city. Official sources previously informed that PM Khurelsukh expressed that Mongolia hopes to increase annual coal export to 30 million tons to PRC during his meeting with the President of PRC Xi Jinping.

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Smartphone demand shifts to app businesses

Information Technology industry revenue total MNT 1.07 trillion

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The fast expansion of global smartphones market had massive surge in Mongolia's IT industry as 3G data usage grew by 51 percent, (from 17.4 terabyte to 26.3 terabyte) last year, according to the Communications Regulatory Commission of Mongolia (CRC). The CRC has recently released the 2017 key indicators of telecommunication sector. The report shows that number of active mobile users reached 3.9 million in 2017, a 12.2 percent growth compared to 2016. Smartphone users in Mongolia totalled 2.4 million, of which 71.9 percent were Android OS users, while iOS users amounted to 21.7 percent. The demand is relatively high for a small economy. Experts expect mobile services to grow faster as they envisage the economy to pick up in 2018-19, highlighting that mobile services have expanded in Mongolia even during economic difficulties.

However, demand is becoming one of the major challenges for global smartphone industry as users tend to hang on to their phones longer. It is because big leaps in features, such as better cameras are no longer significant for consumers. Google’s vice president and product manager Mario Queiroz said last year, “We are getting to the point where photo quality is already so good that the focus is turning to the smarts that you build beyond that.” As such, the fall in smartphone demand is leading a constant growth for app businesses. Over the years, several innovative models emerged in Mongolia, such as financial service app LendMN and UBCab taxi service. As a developing country, the app market in Mongolia is fairly young, but commercial banks’ engagement in fintech apps provide favorable payment infrastructure. For example, Trade and Development Bank’s Most Money app provides easier credit purchase for prepaid mobile devices. In 2017, IT industry revenue totalled MNT 1.07 trillion, half of which was by mobile network. Investments in the IT sector amounted MNT 173.2 billion, while taxes generated from the sector accounts to MNT 150.2 billion.