KATHMANDU, June 10: ‘BSNL-like situation if expansion plans delayed further’

Nepal Telecom (NT) is now in the same situation that India’s Bharat Sanchar Nigam Ltd (BSNL) was in between 2007 and 2012.

The Indian government undertaking could not implement its expansion plan for at least four years. Because of this, BSNL not only lost a huge earning opportunity but also slipped to ninth position from first, while watching its main competitors -- Airtel, Vodafone and Idea -- grow by leaps and bounds. 

NT has been trying to bring a strategic partner for about a decade now. Hurdles that NT has have been facing in appointment of consultant to induct a strategic partner is similar to the problems faced by BSNL between 2007 and 2012. The state-owned telecom operator was in the final stage of appointing a consultant out of six that had applied when the Commission for the Investigation of Abuse of Authority (CIAA) intervened some 18 months ago. CIAA has remained silent on the issue since then.

NT officials opine that the situation is similar to the one faced by BSNL while it was preparing to initiate tender process for expanding mobile services.

“Delay in launching the mobile service proved costlier for BSNL as it lost about IRs 50 billion. We did not face that kind of problem while launching mobile phones though,” an NT official said, requesting anonymity as he is not authorized to talk to media. “But the hurdle in selecting consultant could prove costly.”

Dinesh Thapaliya, secretary of the Ministry of Information and Communications, said they cannot proceed further until CIAA comes up with final decision in the issue. “If plans and programs cannot be implemented, NT’s revenue and market share will shrink,” Thapaliya, who chairs the board of directors of NT, said.

This is not the first time that NT has faced investigations and interrogations by different oversight agencies. But none of them lingered for long like the current one.

NT officials say lengthy decision-making and procurement process and too many oversight agencies are some of the reasons why NT has not been able to expand like private companies.

According to Nepal Telecommunications Authority, NT and privately-owned Ncell are neck to neck in terms of market share in GSM. 
Ncell now has a new owner -- Malaysian company Axiata -- which has unveiled aggressive expansion plan. Axiata has strong presence in Indonesia, Malaysia, Bangladesh, Sri Lanka and Pakistan. In this backdrop, NT’s plan of hiring a consultant for hiring strategic partner must take off if it is to be competitive enough. But CIAA has blocked the process. 

CIAA Spokesperson Krishna Hari Pushkar did not respond to phone calls and SMS sent by Republica.

In the budget for Fiscal Year 2016/17, the government unveiled a plan to roll out 4G service in different parts of the country. Though NT is still clueless about the plan, its competitor, according to government officials, is ready to roll out the service. 

Thapaliya say Ncell can capture the 4G market of urban centers within few weeks if it is allowed to launch the service without strengthening NT.

Responding to Republica’s email query, officials of Ncell said it will need about two months to order equipment, test the technology and launch the service in Kathmandu. But NT officials say it can take a minimum of one year as NT has to follow existing procurement laws.
NT officials say oversight agencies like CIAA and parliamentary are not aware of the importance of 4G service.

 
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