The ever-burgeoning mobile market and 6 to15 million new mobile subscribers popping up every month in India alone has drawn the attention of industry players both inside and outside Nepal. Mobile penetration in Nepal has just reached 17.81 percent which indicates that there is still a huge potential for growth in this sector. Free incoming calls and availability of cheaper handsets has made this service attractive for customers of all hues. This has been further fueled by the government slogan “Hat hat ma mobile, ghar ghar ma internet”.
It has come to my notice that, amongst others, even some reputed newspapers have published sensational news claiming that new mobile licenses have been awarded and the new entrants are all set to start their services. Some even claim that Nepal Telecommunications Authority (NTA), the regulator and the licensor of the telecommunications services in Nepal, has given authorization to provide mobile services to these new aspirants. Nothing could be further from the truth.
Through this article, I want to provide the true status of existing players in the major telecom services and information on how the new entrants can come into the telecommunications market of Nepal and its likelihood.
NTA issued license to operate mobile service to the-then Nepal Telecommunications Corporation (now called Nepal Doorsanchar Company Limited – NDCL)) in May, 1999, as per the directives of the-then Government of Nepal under its special powers. The license was based on GSM 900 technology/standard. Later in 2008, the Government of Nepal issued yet another directive to NTA to amend the mobile license of Nepal Telecom so as to make it technology neutral. It paved the way for NDCL to provide mobile service using the existing CDMA technology. Now NDCL is providing cellular mobile service with the number ranges of 985xxxxxxx, 984xxxxxxx, 975xxxxxxx and 974xxxxxxx. The 985 and 984 series of 10 digit numbers are being used for GSM-based mobile service under the brand of ‘Namaste Mobile’ having a subscriber base of 2,571,340 as of Chaitra 2065. The number range starting from 975 and 974 series are being used for CDMA-based mobile services under the brand name of ‘Sky Phone’ having a subscriber base of 420,328 as of Chaitra 2065.
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NTA issued the second mobile license to Spice Nepal Pvt. Ltd. (SNPL) in September, 2004. That company is offering GSM-based mobile service under the brand name of ‘Mero Mobile’ having a subscriber base of 1,810,814 as of Falgun 2065. The total mobile penetration* -- NDCL and SNPL -- stands at 17.81 percent of the Nepali market.
NTA had previously issued a license to United Telecom Limited (UTL) in October, 2002, for providing Wireless in the Local Loop (WLL)-based basic telephone service. UTL adopted CDMA technology. Later UTL was also allowed to provide Limited Mobility Service. But it has to take license in each geographical area demarcated by the existing area codes. Since both fixed and limited mobility services are being provided with the same infrastructures such as MSC, BSC and BTS, NTA also authorized UTL to provide roaming facility to and between its limited mobility subscribers. Thus UTL become a de facto cellular mobile operator based on CDMA technology. UTL now has a fixed subscriber base of 67,637and limited mobility subscribers had reached 66,404 as of Chaitra, 2065.
For issuing basic telecommunications and mobile telecommunications license, NTA first publishes a public notice. Interested and qualified persons can submit applications. Applications will be evaluated and NTA then awards the license to the most qualified applicant.
NTA issued the basic telecommunications license to UTL and mobile license to SNPL. Such licensees possess five years exclusivity right of operation in the telecommunications service unless the proviso condition is applied.
Three operators, viz.* STM Telecom Sanchar Pvt. Ltd (STM), Nepal Satellite Telecommunications Pvt. Ltd (NSTPL) and Smart Telecom Pvt. Ltd.(STPL) have been issued licenses under the special provision of the Act.
New players
Issuing a mobile service license is not like issuing a license for internet (including email), Global Mobile Personal Communications Systems (GMPCS) also called the satellite phone, Network Service, VSAT User and others. Applications for providing these services can be submitted to NTA at any time and there is no entry barrier in terms of number of operators. Upon evaluation of the submitted application, NTA may issue license if applications are deemed qualified.
The exclusivity period of SNPL terminates in August-end, 2009. Since both mobile operators NDCL and SNPL are expanding their services on a war-footing, UTL has become a de facto cellular mobile operator and the mobile tariff has been reduced drastically due to competition. Also in view of the economic condition of the country, NTA is yet to decide on whether or not to allow new mobile operators in the country. A feasibility study is under process. Moreover small chunks of spectrum (frequency) that is being used for mobile telephone operation globally have also been assigned to the Basic and Rural Telecommunications service providers for providing WLL and Limited Mobility services leaving no valuable spectrum for new entrants. However, NTA can revoke some of the spectrum temporarily assigned to the operators and some of the operators may surrender some spectrum due to the cost involved in using it if a new pricing policy is implemented.
Even if all the legal, technical and feasibility conditions are met, based on our previous experience of licensing UTL and SNPL, a new entrant can operate mobile service only after about three years.
If Nepal adopts the unified license concept through the amendment of the Telecom Act, the scope for a new mobile operator could be strongly debated as all the six operators mentioned above vis-a-vis NDCL, UTL, SNPL, STM, NSTPL and STL would become unified licensee and eligible to provide mobile services.
Writer is director and secretary at Nepal Telecommunications Authority.
* (Corrected)
