The commitment is one of the pledges made by the PDP government during the election campaigns
The Ministry of Industry, Commerce, and Employment (MoICE), led by Lyonpo Namgyal Dorji, has reaffirmed the government’s commitment to reducing internet and data costs by 50% as part of the 13th Five-Year Plan (FYP) and Bhutan’s national digital strategy. This announcement came during the parliamentary question hour in response to inquiries by MPs Sangay Thinley (Khar-Yurung Constituency) and Lhakpa Tshering Tamang (Sergithang-Tsirang Toed Constituency) regarding progress on this initiative.
Leaping a step towards digital accessibility, Lyonpo Namgyal Dorji highlighted that reducing internet costs is pivotal to Bhutan’s goal of becoming a high-income Gross National Happiness (GNH) economy by 2034. “This initiative supports our long-term vision by enhancing digital accessibility and affordability,” he said. However, the minister acknowledged that Bhutan’s current internet service costs rank among the highest regionally and globally, limiting digital connectivity.
The minister was responding to questions in the parliament on Friday where MPs asked when the government plans to reduce high data charges and whether alternative measures, such as introducing a third network provider like Starlink, would be considered if agreements with current service providers fall short. MPs expressed concern that data and communication costs remain significantly high despite government efforts. The government was also asked what concrete measures have been taken to tackle this challenge and whether the proposed cost reduction would be implemented by the end of 2024.
In response, the minister outlined the government’s proactive measures. During the first session of the Fourth Parliament in July 2024, the Prime Minister reaffirmed the government’s pledge to reduce internet costs by half. An executive order issued on July 13 directed GovTech, Bhutan InfoComm and Media Authority (BICMA), and all telecom providers to submit strategies for achieving this reduction by August 15, 2024.
A sub-committee comprising MoICE, the Ministry of Finance, and the Ministry of Infrastructure and Transport was subsequently formed to review proposals and identify feasible solutions.
Bhutan currently has two main telecom operators, Bhutan Telecom (BTL) and Tashi Cell, alongside 20 Internet Service Providers (ISPs). The minister revealed that financial analyses suggest BTL could implement the 50% cost reduction while maintaining a profit margin of Nu 46 million. However, this would result in short-term revenue losses for Druk Holding and Investments (DHI) and the government.
In 2023, BTL contributed Nu 2,560 million in dividends to DHI, which in turn contributed Nu 3,361 million to the government. Despite the potential initial loss in revenue, the government anticipates that lower internet costs will stimulate increased usage, economic activity, and ultimately, long-term revenue growth.
High internet costs and low speeds have hindered digital connectivity, innovation, and economic growth in Bhutan. To address these issues, the government has approved Starlink, a Foreign Direct Investment (FDI) Internet Service Provider, to complement existing providers. “Starlink will enhance accessibility and affordability, particularly in underserved rural areas,” the minister stated.
Additionally, the government is considering relaxing dividend targets for BTL to facilitate the cost reduction and support the broader digital transformation agenda.
In the meantime, the Cabinet is expected to finalize decisions in the coming weeks, and the government remains optimistic about the feasibility of its plans. “We are confident that the 50% cost reduction can be implemented soon, ensuring affordability for citizens while maintaining the sustainability of ISPs,” the minister said.
This initiative, he added, is a critical step in Bhutan’s digital transformation, fostering innovation, business creation, and economic growth. By making digital connectivity more affordable, Bhutan aims to enhance access for rural and low-income communities, paving the way for a more inclusive and prosperous future.
Nidup Lhamo from Thimphu
