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Hello, Bhutan? It's capitalism calling

A Bhutanese man makes a cell-phone call as he stands beside an election campaign board displaying candidate posters in March 2008.

TEXT OF STORY

KAI RYSSDAL: Let's take a break for a minute and go someplace where the financial events of the past couple of weeks haven't really made much of a dent in the national conversation. A place that measures its health in by Gross National Happiness, not GDP, Bhutan's about as far away from Wall Street as you can get.

The tiny Asian kingdom of 700,000 has had television for less than 10 years. Cell phones arrived even later. But Lisa Napoli explains things are changing, and Bhutan is experiencing its own brand of business upheaval.


LISA NAPOLI: Until a couple months ago, if you wanted a cell phone in Bhutan, you only had one choice. [Sound of ring tone]

B-Mobile, owned and operated by the government. Then, this past spring, a privately owned competitor was let in. And in this peaceful Buddhist country, a cell phone war erupted.

Commercial: Tashi Cell -- Keep in touch!

Tashi Cell debuted with a capitalist flourish few people in this poor Himalayan nation have ever experienced. Banners flew on the streets of the capital city, and roadside stands were set up to lure customers in. Glossy ads ran in the newspapers.

Then came the bombshell offer: Unlimited free calls for 10 weeks -- if you're calling Tashi to Tashi.

TASHI TSHERING: So, we have to try, I mean, whatever we can -- in any ways we can -- to get a customer base.

That's Tashi Tshering of Tashi Cell.

TSHERING: I thought this free scheme would work because we are basically creating a habit for the people to use mobile services.

Tashi Tshering knew that in a place where people can barely afford the $2 charge to reload a phone card, a free scheme would be a wonder. And it was. Monks, teenagers, old men -- suddenly everybody seemed to have a phone attached to their ear.

People started dialing randomly, just to see who'd pick up. Of course, this created some problems.

Ngawang: Tashi Cell, it always says connection error.

That's my friend Ngawang, who like many people trying to reach me on my Tashi Cell, complained that she could never get through. To deal with clogged lines, Tashi started dumping chatty callers, mid-yap, after just a couple minutes.

Meanwhile, B-Mobile has been suffering. Managing director Yeshey Tsogay says she's lost almost a third of her
customer base as the Tashi subscriber numbers have swelled.

Yeshey Tsogay: This scheme that Tashi has launched is really, like, you know, creating havoc with our business, actually.

And B-Mobile can't cut its rates to compete with Tashi for six months. The Bhutanese equivalent of the Federal Communications Commission called for the price-slashing ban. It wants to give Tashi a chance to get a foothold in the market.

B-Mobile's done what it can by giving bonus talk time and new services away.

B-Mobile Commercial: B-Tunes and MMS are free of charge. Don't miss this opportunity to try out our entertaining services.

Meanwhile, the prospect of a battle for consumers once the ban expires has cell-phone addicts like Kuenga Gyaltshen pretty excited.

KUENGA GYALTSHEN: Up until now, because of the monopoly, we've all been suffering. So, I mean, it's finally time the consumer actually is king for a little while.

And in a place where a monarch had absolute rule until earlier this year, that seems a fitting development.

In Thimpu, Bhutan, I'm Lisa Napoli for Marketplace.

About the author

In more then twenty years in journalism, Lisa Napoli has managed to work for almost every major

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