Nepal to license third GSM operator to boost competition

13 Dec 2012

National regulator the Nepal Telecommunications Authority (NTA) is considering plans to issue a third mobile licence to a GSM operator in the country, as it looks to galvanise competition in the local market. MyRepublica reports the agency’s new chairman Digambar Jha as saying that the market has become imbalanced in recent years due to Nepal Telecom (NT) deteriorating badly, and leaving privately owned rival Spice Nepal (Ncell) to grow ‘without competition’. The NTA official says such a situation is to the detriment of end users and that introducing competition from another GSM operator from the private sector is ‘critical’ to redress the current shortfalls. The NTA’s plan, Jha said, is to award a GSM licence to one of the country’s three rural telecoms operators or limited mobility service (LMS) providers, through the issuance of a unified licence. ‘Instead of introducing a new player, we will award the licence to one of the existing operators,’ he said, hinting that Smart Telecom or United Telecom Limited (UTL) have already applied for a unified licence and are expected to get the authority’s approval ‘soon’.

Last month, TeleGeography’s CommsUpdate reported that four out of six telecoms service providers in Nepal had applied for the new unified service licences being offered by the regulator. The four – NT, Ncell, Smart Telecom and UTL – all submitted applications on or by 27 September, and began paying the requisite licence, royalty and frequency fees stated as a condition of obtaining a unified licence. At the time NTA director Ananda Raj Khanal added that UTL and Smart – like NT and Ncell – would be eligible to offer GSM and 3G mobile services if their bids are approved. The government of Nepal ratified the planned introduction of a unified licensing scheme in May 2012, allowing network operators to deliver fixed, mobile and data services on a single licence in return for a fee of NPR357.50 million (USD4.09 million) and the agreement to pay a licence renewal fee of NPR20.13 billion for ten years. Jha told the paper that he has already instructed relevant officials within the NTA to confirm whether or not those applying for unified licences have fulfilled their existing licensing conditions.