KATHMANDU: Nepal continues to suffer from frequent internet blackouts due to government inaction, delayed foreign payments, and regulatory hurdles that have crippled the nation’s internet service providers. The crisis escalated recently when Indian bandwidth provider Airtel reduced Nepal’s internet access over non-payment of dues exceeding NPR 6 billion. Major internet service providers, including WorldLink, CG Net, DishHome, Subisu, and Vianet, have reported severe disruptions, affecting millions of users nationwide.
Internet Service Providers’ Association of Nepal (ISPAN) has blamed the Nepalese government for failing to approve the necessary foreign exchange payments, causing tensions with international bandwidth providers. ISPAN President Sudhir Parajuli stated that Nepal’s reliance on Indian internet providers has made the situation more fragile, with no alternative backup. He warned that if the government does not act immediately, Nepal could face a complete internet shutdown, disrupting businesses, banks, education, and communication across the country.
Nepal currently imports around 70% of its internet bandwidth from Indian companies such as Airtel and Tata Communications. However, for the past two years, ISPs have struggled to make payments due to foreign exchange restrictions imposed by Nepal Rastra Bank (NRB) and the Ministry of Communication and Information Technology (MoCIT). Despite repeated appeals from ISPAN, the government has neither addressed the issue nor provided a concrete solution, leaving ISPs with mounting debts to foreign providers.
Adding to the crisis is Nepal’s heavy taxation on internet service providers, which further strains their ability to sustain operations. ISPs are subject to multiple taxes, including telecommunications service charges, royalty fees, and a mandatory contribution to the Rural Telecommunications Development Fund (RTDF). These high costs, combined with the government’s delay in foreign payment approvals, have created an unsustainable business environment, with ISPs warning that continued inaction could force them to shut down operations.
Meanwhile, the regulatory framework governing Nepal’s telecommunications sector remains outdated, with the Telecommunications Act 1996 failing to accommodate the growing demands of a digital economy. Industry experts argue that the government has prioritized state-owned telecom companies over private ISPs, allowing government-run operators to bypass foreign payment restrictions while imposing strict regulations on private companies. This unfair policy has raised concerns about Nepal’s ability to attract foreign investment in the information and communication technology (ICT) sector.
As Nepal moves toward digitization under the Digital Nepal Framework, experts warn that ongoing internet disruptions could severely impact economic growth. Sectors reliant on stable internet connectivity, such as e-commerce, banking, and IT services, have already suffered losses due to these blackouts. With businesses increasingly dependent on digital platforms, further disruptions could deter foreign investors, reducing Nepal’s competitiveness in the global digital economy.
ISPAN has urged the government to immediately facilitate the necessary foreign currency transactions to prevent further damage to the country’s internet infrastructure. The association also called for tax reforms and policy changes that would enable ISPs to operate without excessive regulatory burdens. Despite the warnings, the government has yet to take decisive action, raising fears that Nepal may experience prolonged internet blackouts in the near future if urgent measures are not implemented.