Ericsson will provide the Asian telco with LTE equipment in the 1800MHz spectrum band to enable the transfer from 2G to 4G in a single movement.
Initial services are expected to be launched in the country’s capital of Thimphu this year.
“4G LTE gives users more of what they want,” Fredrik Jejdling, head of region at Ericsson India, told local media sources.
“It will transform the way people in Bhutan communicate, share information, collaborate, consume content and stay connected."
Further terms of the contract state that Ericsson will provide its authentication and authorisation service, Home Subscriber Server (HSS), offering to Bhutan Telecom.
“As data usage increases, our major network initiatives, including last year's 3G network modernisation and roll-out of 4G in the capital city this year will be critical in ensuring we deliver the best services to our subscribers," said Nidup Dorji, CEO of Bhutan Telecom.
Ericsson signed a deal with O2 to roll out its 4G network in the UK earlier this week, and has announced a range of similar agreements at Mobile World Congress in Barcelona.