KATHMANDU: Stakeholders in Nepal’s telecommunications sector have called for immediate government intervention as the industry approaches a critical juncture.
Speaking at a program titled “Revitalizing the Telecom Industry” organized by the Society of Economic Journalists of Nepal (SEJON) on Wednesday, experts and officials highlighted the urgent need for policy reforms and strategic investments to avert an impending crisis.
Presenting a working paper at the event, telecommunications expert Manohar Kumar Bhattarai pointed out that the telecom sector’s contribution to the economy has dropped from 3.6 % to 1.8 % in recent years. Despite 90 % 4G coverage across the country, only two out of ten users regularly use data, reflecting Nepal’s weak mobile internet usage compared to neighboring countries.
Bhattarai emphasized that increasing 4G usage has pushed operators to make hefty investments to maintain their services. However, diminishing returns and high reinvestment costs have strained the financial stability of service providers. He estimated that telecom companies need around Rs 6 billion annually to operate smoothly, warning that the continuous decline in income does not bode well for the industry.
Jabor Kayumov, CEO of Ncell, expressed grave concern about the state of Nepal’s telecom industry, cautioning that it is on the brink of a major crisis. He noted that Nepal’s ranking on the Global Mobile Services (GMS) list has fallen from 117th to 119th over the past two years. The lack of a conducive environment for foreign investment has further aggravated the situation.
Kayumov also criticized the Nepal Telecommunications Authority (NTA) for focusing more on revenue collection than facilitating service providers. He urged the government to tighten regulations on importing phones that do not support VoLTE technology, as Ncell plans to phase out 3G services by 2025.
Bhupendra Bhandari, Chair of the NTA, acknowledged the declining quality of telecommunication services but denied claims of the sector shrinking. He argued that the business has shifted from traditional telecom to Internet Service Providers (ISPs).
He stated that while 4G coverage is expected to reach 100 % within a year, shutting down 3G services before 2G may not be practical due to consumer capacity issues.
Bhandari assured stakeholders that the NTA is prepared to approve 5G services within a week of receiving applications from operators. He dismissed the notion that 5G technology is prohibitively expensive, suggesting that it could be launched in eight major cities soon.
Minister for Communications and Information Technology Prithvi Subba Gurung highlighted that the government is committed to managing the challenges facing the telecom sector. Acknowledging the insufficient regulatory role, he informed that a draft of a new telecommunications act is being prepared to address issues such as licensing fees and the adoption of new technologies.
He also pledged to reduce the burden of the Rs 20 billion renewal fee and ensure that regulatory work is carried out without bias. Radhika Aryal, Secretary of the Ministry, stressed the need for all stakeholders to come together to find sustainable solutions and properly implement existing laws.
Stakeholders collectively stressed the importance of government support to revitalize the telecommunications sector. They highlighted that without prompt action, declining revenues and limited foreign investment could push the industry toward a deeper crisis. Ensuring a balanced regulatory environment and fostering innovation will be essential to sustaining Nepal’s digital growth.
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