The main objective of encouraging competition is to modernise the national telecommunication network within short period of time, expand the coverage of services, reduce the service prices, improve service quality to internationally accepted level and to comply with the worldwide development trends. 

1. The monopoly right in basic telecommunication services granted to Mongolia Telecom and the exclusive right given to Mobicom Corporation in proving cellular service are to be eliminated by 31 December 1998, however, the monopoly right in international basic telecommunication services and international telephone gateway will be retained until 31 December 2001. All the legal, policy, economic and financial conditions for introducing fair and free competition in all kind of value added services would be created accordingly.
2. Within the framework of the above mentioned policy development of cellular phone, paging, personal mobile system, internet phone, services using CPE and LAN, GMPCS services etc. will be encouraged.
3. BOT, BTO, Business Contract, Joint venture, revenue sharing agreement etc. all possible internationally accepted forms of direct foreign investment  will be accepted.
4. During implementation of liberalisation and competition programs no discrimination between local and foreign investors will be allowed and in case if the terms and conditions offered by local and foreign investors are equal then preference may be given to local investors during tender evaluation process.
5. The policy for introducing fair competition in telecommunication sector shall not contradict with the principles of national security, the provisions of the Telecommunication Law and other laws and regulations of Mongolia.
6. The lisences for provision of new services in new regions will be granted through open and fair bid and the license fee payment shall be used for universal service fund to finance selected projects.
7. To develop the regulations to support investment of the service providers, who have established a network in the rural areas and are providing the services, from the fund for the development of universal services.
8. In the case of not being able to provide with the support for the above mentioned investments, it should be allowed to recover the losses in connection with provision of services in rural areas by getting the licenses for high profit service areas as compensation of the loss. 
9. The service providers who have exclusive right license with the high revenue in the market segment or to make highly profitable business in areas should be given universal service obligation to provide service in unserved unprofitable rural areas. 
10. The service providers which use the basic PSTN network should have an interconnection agreement with the basic network operator and in case if they can not reach an agreement the regulatory body will regulate the issue according to the existing regulations.
11. Manufacturing of telecommunication network equipment, CPE and other telecommunication equipment will be conducted on full competition basis. ITU and national standards shall be applied for manufacturing, supply and operation in telecommunication field.
12. While liberalising the telecommunication sector and introducing competition, it will ensured to allow free, fair and non-discriminatory full interconnectivity and free access to leased lines and circuits at fair and cost based tariff and fair interconnection charges according to internationally accepted practices and issue all the related regulations and regulatory documents.