Nepal - Telecoms, Mobile, Internet and Forecasts

Executive summary

Momentum of the reform process in Nepal’s telecom sector is showing fresh signs of a slowdown

A number of factors had been slowing the early development of Nepal’s telecom network. Certainly the country’s mountainous topography has made it extremely difficult to develop its telecommunications infrastructure. Furthermore, Nepal had been struggling under an adverse economic situation caused largely by political instability. Over the years, acts of terrorism and the activity of the Maoist rebels operating throughout the country have taken their toll on the telecom network – both directly and indirectly. But of late the tardiness of the government in addressing market reforms and developing national policies has been weighing on the overall development of the telecom sector.

The country has certainly been on a road to recovery from the long years of civil unrest. Nepal’s transition to a considerably more stable nation had begun by 2007. The country’s first elections for over nine years were held in 2008; a clear victory going to the Maoists who were as a result to become a party of government. Although the way forward was not necessarily going to be smooth, with this remarkable turnaround following years of great difficulty, the scene was set to build on the considerable progress already made in recent times in meeting the growing demand for telephone services. Not only has there been strong subscriber growth, especially in the mobile sector, but there was evidence of a clear vision in the sector, including putting a reform process in place and planning for the building of necessary telecommunications infrastructure. Most importantly, the Ministry of Information and Communications (MoIC) and the telecom regulator, the National Telecommunications Authority (NTA), both became very active in the performance of their respective roles. However, as already noted, by 2013 there was evident concern that some of the momentum of the reform process had been lost.

The Nepal Telecom Company, the state-owned incumbent operator, has been the major builder and operator of the national telecom network. For a long time it held a monopoly over all aspects of telecom in the country. With the opening up of the market, Nepal Telecom lost its monopoly on basic telecom services a little more than a decade ago with the licensing of United Telecom Ltd (UTL). It subsequently surrendered its monopoly on mobile services with the licensing of Spice Nepal Pvt Ltd, later known as Ncell, in 2004. The period after 2006 saw notably strong subscriber growth, especially in the mobile segment of the market. Mobile penetration went from 5% in 2007 to more than 60% in 2013.

Despite all the energy that has gone into the sector, there was still a significant disparity between the high coverage levels in the cities and the coverage available in the underdeveloped rural regions. Progress on providing some minimum access had been good, however.

Market highlights:

  • By mid-2013 mobile penetration in Nepal, relatively low by world standards, was quickly moving upwards, with mobile subscriber numbers having increased fourfold in just four years;
  • Fixed-line growth in Nepal was particularly slow and the market had effectively ‘flattened out’ for a few years; there were very few signs that it would pick up again in the short to medium term, even allowing for some expansion into the underserved rural areas;
  • After being sluggish for years, the internet segment of the market has finally started to move; user penetration has been increasing rapidly in recent years;
  • While broadband represents a high proportion of total fixed internet connections, internet subscriptions remain low;
  • The NTA has committed to using the Rural Telecommunications Development Fund (RTDF) to help fund the build out of a national optical fibre network;
  • By 2012, the slowing pace of reforms in the telecom sector was of concern; finding a strategic partner for Nepal Telecom, for example, seemed to lack the commitment of key agencies;
  • In early 2013, after a long delay, Nepal Telecom finally launched its full WiMAX service for business and residential;
  • The Commission for Investigation of Abuse of Authority (CIAA) gave its approval in early 2013 for the government to begin issuing unified telecom licences to alternative operators;
  • After years of uncertainty Nepal’s economy was continuing to struggle; however, the government remained committed to prudent fiscal management and it was hoped that a rebuilding process has finally started.

Nepal – key telecom parameters – 2012 - 2013

Category
2012
2013 (e)
Fixed-line services:
Subscriber penetration
3%
3%
Internet:
Subscriber penetration (fixed)1
0.6%
0.8%
Mobile services:
Subscriber penetration
53%
70%

(Source: BuddeComm)

Note: 1fixed internet subscribers only, excluding mobile services

This report provides an overview of the trends and developments in the telecommunications market in Nepal. Subjects covered include:

  • Key statistics;
  • Market and industry overviews;
  • Major operators (mobile and fixed)
  • Regulatory environment;
  • Infrastructure;
  • Mobile market;
  • Internet and broadband markets;
  • Telecom market scenario forecasts (fixed-line, internet, mobile subscribers) for 2015 and 2020.

Table of Contents

  • 1. Executive summary
  • 2. Key statistics
  • 3. Country overview
    • 3.1 Background
    • 3.2 Economy
    • 3.3 Political crisis and resolution
  • 4. Telecommunications market
    • 4.1 Overview of Nepal’s telecom market
      • 4.1.1 Background
  • 5. Regulatory environment
    • 5.1 Regulatory authority
      • 5.1.1 Nepal Telecommunication Authority (NTA)
    • 5.2 Telecommunications Policy 1999
      • 5.2.1 Universal service
      • 5.2.2 Rural Telecommunications Development Fund (RTDF)
    • 5.3 Telecommunications Policy 2004
    • 5.4 Telecom sector liberalisation and licensing
    • 5.5 Commission for Investigation of Abuse of Authority (CIAA)
    • 5.6 Foreign assistance
    • 5.7 Privatisation of Nepal Telecom
    • 5.8 Broadband policy
    • 5.9 Regulatory developments
      • 5.9.1 2013
      • 5.9.2 2012
      • 5.9.3 2011
  • 6. Basic telephone service providers in Nepal
    • 6.1 Nepal Telecom (formerly Nepal Doorsanchar Co Ltd)
      • 6.1.1 Overview
    • 6.2 United Telecom Ltd (UTL)
      • 6.2.1 Dispute over licence fees
    • 6.3 Nepal Satellite Telecom (NST)
    • 6.4 Smart Telecom
    • 6.5 STM Telecom
  • 7. Telecommunications infrastructure
    • 7.1 National telecom network
      • 7.1.1 Overview
    • 7.2 Forecasts – fixed-line market – 2015; 2020
      • 7.2.1 Nepal East West SDH project
    • 7.3 International infrastructure
      • 7.3.1 Overview
      • 7.3.2 Proposed satellite
    • 7.4 Voice over Internet Protocol (VoIP)
  • 8. Internet market
    • 8.1 Overview
    • 8.2 Internet statistics
    • 8.3 Forecasts – Internet services – 2015; 2020
    • 8.4 Broadband internet
      • 8.4.1 Overview
      • 8.4.2 WiMAX
    • 8.5 ISP market
    • 8.6 Internet Exchange
    • 8.7 Internet Protocol TV (IPTV)
  • 9. Mobile communications
    • 9.1 Background
    • 9.2 Mobile statistics
    • 9.3 Third Generation (3G)
    • 9.4 Fourth Generation (4G)
    • 9.5 Forecasts – mobile market – 2015; 2020
    • 9.6 Major mobile operators
      • 9.6.1 Nepal Telecom (NT)
      • 9.6.2 Ncell (formerly Spice Nepal)
    • 9.7 Satellite mobile
    • 9.8 M-commerce
  • 10. Notes on forecasting
  • 11. Related reports
  • Table 1 – Country statistics Nepal – 2013
  • Table 2 – Telephone network statistics – June 2013
  • Table 3 – Internet user statistics – June 2013
  • Table 4 – Mobile statistics – June 2013
  • Table 5 – National telecommunications authorities
  • Table 6 – Nepal’s GDP real growth rate – 2006 - 2014
  • Table 7 – Licences issued for telecom services – June 2013
  • Table 8 – Fixed subscribers by operator – wireline and WLL – June 2013
  • Table 9 – Nepal Telecom’s fixed subscribers – wireline and WLL – 2006; 2011 - 2013
  • Table 10 – UTL’s subscribers – limited mobility and WLL – 2011 - 2013
  • Table 11 – Smart Telecom’s subscribers – limited mobility and fixed-line – 2011 - 2013
  • Table 12 – Fixed-lines in service and teledensity – 1995 - 2014
  • Table 13 – Fixed WLL subscribers – 2006; 2008 - 2013
  • Table 14 – Fixed-line subscribers – wireline and WLL – 2010 - 2013
  • Table 15 – Forecast fixed line subscribers – 2015; 2020
  • Table 16 –Internet users and penetration rate – 1997 - 2014
  • Table 17 – Fixed internet subscribers – 1999 - 2013
  • Table 18 – Internet subscribers by technology – June 2013
  • Table 19 – Percentage of households with internet – 2009 - 2013
  • Table 20 – Fixed broadband subscribers – 2007 - 2014
  • Table 21 – Fixed broadband subscribers and household overview – June 2013
  • Table 22 – Internet bandwidth capacity – 2001 - 2013
  • Table 23 – Forecast fixed internet subscribers – 2015; 2020
  • Table 24 – DSL broadband subscribers – 2007 - 2013
  • Table 25 – Mobile subscribers, annual change and penetration rate – 1999 - 2014
  • Table 26 – Mobile operators, subscribers and annual change – June 2013
  • Table 27 – Mobile broadband subscriptions – 2010 - 2012
  • Table 28 – Mobile internet subscribers – 2011 – 2013
  • Table 29 – Forecast mobile subscribers – 2015; 2020
  • Table 30 – Nepal Telecom (NDCL) - mobile subscribers – 2006 - 2013
  • Table 31 – Ncell’s mobile subscribers – 2006 - 2013
  • Chart 1 - Nepal Telecom's fixed subscribers - wireline and WLL - 2006; 2013
  • Chart 2 - Fixed lines in service and annual change 2000 - 2014
  • Chart 3 - Internet users and penetration rate 2003-2014
  • Chart 4 - Mobile subscribers, annual change and penetration - 2006-2014
  • Exhibit 1 – Level of competition by market segment – 2012

Focus Report profile

Single-User PDF Licence: US$490.00EX GST
Member Discounts Apply
Purchase
License Information

Your Cart

Your Cart is empty

Purchase with Confidence

"Just a quick note to say thank for your helpful reports. I`ve used them a couple of times over the years and I found your talk at CeBIT, very interesting indeed."

Matt Joyce, IT manager, Medtronic

» More from our customers..

Special Offers

More than 4,000 customers from 140 countries utilise BuddeComm Research

Are you interested in BuddeComm's Consulting Services ?

Quick Search

News & Views

Have the latest telecommunications industry news delivered to your inbox by subscribing to Paul's FREE weekly News & Views.

Contact us

Email     pbc@budde.com.au

Copyright © 2014 Paul Budde Communication Pty Ltd. All rights reserved. All trademarks and copyrights are the property of their respective holders. Design by Arcaeda | Hosted by Ipera