Internet prices likely to go up from mid-July

Published On: June 19, 2019 03:30 AM NPT By: Zenith Shah

KATHMANDU, June 19: Internet Service Providers (ISPs) have warned that Internet prices could go up by 20 percent from the beginning of new fiscal year 2019/20 if the government decides to continue 13 percent telecommunication service charge (TSC) on Internet service.

The cabinet meeting held last week decided to provide tax waiver to ISPs on router, installation of intranet/lease line connectivity and maintenance, asking ISPs to adjust TSC on Internet package cot.

The decision came after Internet Service Providers' Association Nepal (ISPAN) decided to raise price of Internet services after the budget for the upcoming fiscal year decided to give continuity to TSC on Internet introduced in the budget for the current fiscal year.

Bhoj Raj Bhatta, president of ISPAN, termed the cabinet decision was taken in haste without doing any study. "We are not happy with the decision," he said, adding: "We want the government to fulfill our demands."

He also said that the association will inform government officials about its decision to raise Internet prices before making formal announcement by organizing a press meet by July 5.

The row between the government and the ISPs over Internet prices began last year when the government took a decision to levy TSC on Internet services. ISPs say that the government took the decision without consulting the service providers and studying the market.

Later, the ministry officials and ISPs held a meeting and an agreement was reached for adjustment of TSC in Internet package cost without putting additional burden on consumers. In return, the government assured subsidies and adjustment in taxes to service providers.

"As agreed with the ministry, we adjusted 13 percent TSC in our package cost because the decision could not be rescinded," Bhatta said. "However, the government has not done anything toward fulfilling assurances made to us."

The average monthly cost of Internet of 20 mbps is Rs 1,400. If the ISPs start levying 13 percent TSC, the price will increase to Rs 1,680.

The decision of the government to levy additional taxes on Internet services contradicts with the Broadband Policy, 2015, which promises to bring down the cost by 2018.

Meanwhile, ISPAN has said that Internet prices will go further if Nepal Electricity Authority (NEA) does not review its decision to hike rental fee of poles by five times. NEA has told the association that it will review the rental fee.

The power utility has formed a committee that has representations from Nepal Telecommunications Authority and ISPAN to review the rental fee.

While the rental fee may not increase be five times as said by NEA, ISPs say it is certain to increase.

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