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Ramesh Shrestha

The Kathmandu Post

Publication Date : 13-02-2013

Nepal’s telecom companies have been adding 300,000 plus new telephone subscribers each month, and the user base is expected to reach 20 million by March-end, according to the Nepal Telecommunications Authority (NTA). This will put the country’s tele-density at 75.5 percent out of the total population of 26.49 million. Just two years ago, there were 10 million telephone subscribers in Nepal.

The NTA has attributed the rise in tele-density to the popularity of voice service, expansion in network coverage, affordability supported by a reduction in the poverty rate, falling tariffs, competition fuelled by innovative business ideas and customer-friendly package services.

“Pre-paid mobile service with free incoming call service is the major reason for the growth in subscription,” said NTA director Ananda Raj Khanal. He added that despite slashed phone charges, telecom companies were making good profits due to the popular packages designed with customer needs in mind.

A rapid expansion in mobile service was instrumental in pushing growth in the telecom sector. In 1999, when Nepal Telecom first started providing mobile service, the country’s penetration rate was 2 percent. The sector received a boost with the entry of a private company Ncell in 2005.

As of the first five months of the current fiscal year (till mid-December 2012), the two major players in the local market Ncell and Nepal Telecom gained 9.04 million and 8.3 million users respectively.

Among the total subscriber base of 18.7 million, mobile users make up 16.6 million and fixed and limited mobility service users make up 2.1 million.

Mobile penetration reached 20 percent in 2010. “We also expect mobile data to take off because the mobile network offers the fastest and easiest way to access the Internet,” said Sanju Koirala, corporate communication director of Ncell. She added that since building mobile communication infrastructure requires sizeable investment, the company was making improvements gradually.

Apart from capacity enhancement, telecom companies have expanded their network coverage in rural areas where there is the greatest need of service. Small telecom companies - United Telecom, Smart Telecom, Nepal Satellite Telecom and STM - are also providing service.

Nepal Telecom has been working to expand mobile service across the country with its 10 million mobile lines and 2 million IP CDMA mobile lines mega project.

“We aim to distribute mobile lines on demand by outsourcing to local companies,” said a senior official. He added that despite huge demand, the company had not been able to provide service due to delays in project implementation.

Nepal Telecom ’s mega project will make available mobile lines that can provide high speed wireless Internet. However, compared to voice service, data service has little demand, but the investment required is high.