Constraints and liabilities

• Small and fragmented market (2.6 million people dispersed over a vast area)
• Remote location in respect to regional markets. One of the lowest population densities in the world
• No direct physical access to the Internet backbone
• Commodity based export market, with exception of tourism which is growing
• High cost of transportation to and from and within Mongolia (air and rail routes predominate, as there are few reliable roads)
• Climate: harsh and cold for much of the year. Short tourist season.
• Limited knowledge of the main international business languages. Some foreign language skills (Russian), but need foreign language teachers to develop proper language skills and to develop use of English as a business language for example
• Hardly any certified networking (TCP/IP  and related) and IT technicians
• Limited ability to produce electronic goods and services and few electronic goods and services available, especially software
• Large and extensive use of  pirated software
• Distinct possibility that many people trained and certified will leave the country in search for better prospects. However, people do return to Mongolia and remittances could increase substantially as a result.
• Lack of skills to grow ICT based businesses
• Lack of experience with Open Source solutions, especially Linux applications for office productivity and TCP/IP and thus more reliance on costly proprietary software systems and applications. Lack of readily available Linux certification programmes. However, there are several Linux servers operating in UlaanBaatar in both commercial and public organizations
• While there are over 1500 Ph.D.’s and over 290 research projects in Mongolia , only 0.17% of the national budget is allocated to research (Education Strategy document)
• While there appear to be no barriers to entry into the Internet service provider (ISP) market and while there seems to be open and relatively fair competition between ISPs in the Mongolian market, it is unclear whether this is due to the presence of policies that encourage this situation or to the fact that the regulatory and legislative authorities are unaware of the situation or unwilling to regulate an activity that appears to be running well. “An open, liberal, competitive and a well-regulated telecommunications sector is essential to improving access to the Internet because it lowers prices and increases the numbers who can afford to connect” .