‘Telecom stakeholders in Nepal voice concerns over sector challenges: urgent reforms needed’

KATHMANDU: Stakeholders in the telecommunications sector have expressed growing concerns regarding the challenges ahead. During a program organized by the Tech Journos Forum (TJF) in Kathmandu on Tuesday, speakers at the interactive session, titled ‘Exploring Opportunities and Challenges in Nepal’s Telecommunication Sector,’ highlighted these issues.

Dr. Achyut Wagle, an economist and professor at Kathmandu University, presented on the problems facing the Nepali telecommunications sector. Despite boasting a 111-year history, he lamented the lack of comprehensive studies on the sector’s development.

He questioned, “Even after 111 years of telecommunications history in Nepal, why haven’t we conducted proper studies on its future requirements and what kind of manpower will be needed in the next five years?” He argued that the government’s lack of appropriately skilled personnel related to the sector’s development is concerning. “Without expertise in emerging technology, we won’t progress. But here, we only talk about technology without understanding its implications,” he said.

Dr. Wagle also highlighted management and administrative challenges in the telecom sector, noting that while administrative changes don’t happen overnight, management changes should evolve accordingly. “I’ve been saying for 25 years that Nepal Telecom needs strategic partners. Problems arise not just from administrative changes but also from managerial changes; while administrators remain static, most tech companies collapse,” he stated.

He pointed out the need to import all telecommunications equipment and the lack of recognition for domestically produced goods and services in the sector. “All the equipment used in this sector is imported, and we don’t even recognize products and services that can be produced locally. Approximately $650 million worth of telecommunications equipment is imported annually,” he said.

He highlighted the contribution of the telecommunications sector to the total GDP, stating that while it contributes 6.6% to the GDP in neighboring India and 5.4% in China, the situation in Nepal is not as optimistic due to the lack of research.

He emphasized the necessity for the government to formulate regulations in advance and to compete in service provision with the private sector to ensure the country’s and private sector’s development.

During the program, Ncell’s Legal and Regulatory Officer Vishal Upadhyay stated that while telecommunications companies in many countries, including India, consume 15 to 20 gigabytes of data per month, in Nepal, individuals consume only 4 gigabytes of data.

Despite the need for policy, rule, and law reforms for the development of the telecommunications sector, problems persist in the 27-year-old law, they said. They mentioned that although there could be a spike in the latest frequency policy made by the government, attention was not paid to it.

“Ncell is also prepared to test and expand 5G services, but considering that it would cost 60 billion rupees and only generate 2 billion rupees in annual revenue, there is a need to think deeply before proceeding,” they said.

Upadhyay further mentioned that the ban on the social networking site TikTok in Nepal has led to a loss of revenue. Within just five months since the government implemented the ban on TikTok on November 13, the revenue of telecom service providers has significantly decreased.

Specifically, Ncell faced a loss of about Rs 1.5 billion due to reduced bandwidth consumption after TikTok’s ban, he said. Similarly, the state-owned Nepal Telecom (NTC) also experienced a decline in revenue proportional to that of Ncell.

The presentation in the program indicated that Sangita Pahadi, Managing Director of Nepal Telecom, emphasized the need for timely changes and consolidation in telecommunications and related laws. She advocated for independent competition in this sector.

With government investment in place, she highlighted the need for the government to integrate government policies and programs into business plans and implement them.

Speaking in the program, Ncell’s CEO Jabhor Kayumov stated that the telecom industry needs government help, and we must all work together at the earliest because this is a problem that can be resolved. The question is how do we go from here, where do we go from here? Nepal is not alone, many countries around the world have gone through what we are experiencing now, but they’ve found a way to tackle these hurdles with effective intervention and regulations.

“As the world prepares for smart cities, smart cars, and AI, Nepal too needs to be at the forefront of technology, and the government needs to enable that so Nepal is not left behind. Foreign investors such as Ncell require a transparent and stable level playing field to ensure consistency of the quality of service at affordable prices for consumers. The success of the digitization process is highly dependent on the quality of telecommunications infrastructure. The future is digital, and Nepal holds huge potential. We remain committed to contributing to Nepal’s digital development.”

During the program, Bhupendra Bhandari, Chairman of the Nepal Telecommunications Authority, addressed the issue of a ‘digital gap’ in Nepal. He noted delays in executing projects funded by the Rural Telecommunication Development Fund (RTDF), stressing the need to expedite these initiatives.

Bhandari said, “The projects funded by RTDF have also faced delays; had they been completed on time, significant progress could have been made.” He underscored challenges within the Internet Service Provider (ISP) and telecommunications sectors, emphasizing the urgency to overcome them.

Additionally, Bhandari highlighted the underutilization of available frequency, which currently stands at only 12.5%. Despite having regulations in place for over 27 years, he emphasized the importance of timely amendments to legislation and regulations.

“The situation has brought attention to the high license fees imposed on mobile services, which telecom operators are finding difficult to afford under current circumstances. It is evident that the longer the current law amendments are delayed, the greater the financial losses incurred by the state,” Bhandari stated.

Regarding the introduction of 5G mobile technology, Bhandari emphasized the government’s role in ensuring investment security. He stressed the necessity of establishing a robust digital ecosystem before implementing 5G.

Bhandari further emphasized the importance of comprehensive studies on various aspects of IT investment, absorption capacity of digital data, and expected returns from 5G investments. He emphasized the need for detailed analysis on these matters.

During the program, Sushil Bhatta, Chief Executive Officer of the Office of the Investment Board Nepal, emphasized the investment prospects in Nepal’s telecommunications, science and technology, and startup sectors.

He mentioned that the government has launched initiatives to promote investment in these key areas during the Investment Summit. Bhatt stressed the importance of addressing investment challenges as a top priority during the conference. Additionally, he called for suggestions, recommendations, and commitments from stakeholders and experts in these sectors to move forward effectively.