Competitive Telephony in Nepal

Madhab Raj Ghimire, LLM
Sushila Subedi Ghimire, MBS

Electric telecommunication in Nepal, if it has not been adopted competitive policy, it might have seen same situation like other network sectors in Nepal, called as corporation. In modern era, if monopolist companies do not adopt effective competition within market, their fate would be like Indian state owned telecom companies which has lost vast majority share of the market and gone to heavy loss last year. It’s happened to that company first time since establishment.

There might be one time monopoly of stake holders of the telecom companies has to face tough competition in coming years like other south Asian companies are facing. However, our telephony might have to face like Indian state giant telecom Bharati Airtel. But in our situation, other competitors are also aggressively expanding their market to be close with Nepal Telecom.

We are seeing some similar situation of India’s dominant mobile operator Bharati Airtel is moving away from Indian market to Africa to expand their market in DTH. It seems that Bharati Airtel home and host business strategy is working well to them.  While Indian competition is getting tough, these dominant players are moving away from Indian market to cash in from Africa to hold the fragile market.

However, we have very different situation than Indian telephony market. Apart from some exception, our dominant player is too moving into different sector such as hydropower investment. But, it’s not that bad unless they are contributing to anti- competitive practices. Other competitors are too expanding their market strategy aggressively since last years. Therefore, this strategy can be justified on the base of competition but we cannot ignore other small market players such as United Telecom or others.

But, there is very frustrating of the spectrum used by Nepal Telecom is not upto date to compare with other operators. While other competitors are paying annual revenue as per license to the government, on the other hand dominant market player has not paid the frequency use. In the fair and competitive market it cannot be justified.  And, it is surprising, Nepal Telecom authority and Ministry of Telecommunication has not worked much to put with in revenue collection priority. The fear is while dominant market player does not pay for the spectrum use, than other competitors may face financial influence from dominant player, Nepal telecom. Thus, loosing revenue from Nepal Telecom and affecting competition cannot be considering good example for competitive telephony in Nepal.