MoIC’s rural telephony plan courts controversy

25 May 2011

The Ministry of Information and Communications (MoIC) in Nepal has sparked controversy in the mountain Kingdom, with privately owned operators claiming the government’s move to draw up a policy for sustainable rural telecoms access is in fact a ruse to kill ‘competition’ among service providers. Local paper The Himalayan quotes an unnamed source at the Nepal Telecommunications Authority (NTA) as saying that private operators are offering services in rural areas because of a profit motive – not because the state has forced them too. Moreover, the NTA spokesperson added that the government has also effectively granted rural telecom service providers large subsidies by charging them less for their licences.

The regulator says that national incumbent Nepal Telecom (NT) has paid NPR210 million for its ten-year licence, while other large players like Spice Nepal (Ncell) and United Telecom Limited (UTL) have paid NPR210 million and NPR100 million respectively. Moreover, each has committed significant sums of between NPR90 million (UTL) and NPR20 billion (Ncell and NT) for the renewal fee. But rural telecom service providers such as STM Telecom Sanchar (STM), Smart Telecom (Nepal) and Nepal Satellite Telecom (NST) have each paid significantly less – STM paid NPR100,000 for ten years, Smart paid NPR100,000 for five years and NST paid NPR2.5 million, according to the NTA. However, the rural telecom service providers counter that they have their own issues and Smart’s CEO Suvash Bajracharya says that not only should the state should come up with a policy ‘to make the rural telecom service providers sustainable’, it should also sort out the problem of scant frequency resources and the problem of rural providers obtaining permission to offer services in certain (more profitable) urban areas too. ‘If the government does not provide subsidy to rural operators, they can never reach a break-even point,’ Bajracharya said.