Applications like WhatsApp, Google Voice, Viber, Skype and Facebook Chat, which are being used as alternatives to traditional voice communication, are eating away revenue of telecommunication firms worldwide. In Nepal too, mobile applications like these are becoming a great challenge to telecom operators. [break]
Most of the operators have seen their revenue from international calls affected over the past years as people are using applications like Skype to talk to their friends and relatives abroad.
According to Nepal Telecommunications Authority (NTA) - the telecom sector regulator, the number of Internet users in Nepal presently stands at 5.52 million. Of them, 5.12 million browse Internet on their mobile phones.
Though Internet penetration in the country stands at 20 percent, operators say revenue they are generating from the service is not encouraging. Data revenue makes for less than 10 percent of total revenue mobilized by telecom operators. Despite this, leading operators are putting aside major chunk of their investment to build infrastructure for Internet connectivity.
Sanju Koirala, corporate communications director of Ncell, said revenue from voice telephone market so far has not been affected as majority of the population still cannot afford smartphones. “But it is clear that mobile date usage will grow tremendously after few years and it will affect our voice revenue,” Koirala said, adding that Ncell has already shifted focus on data.
In order to retain its data users and get new subscribers, Nepal Telecom (NT) has already launched high-speed WiMAX Internet service. The state-owned operator is gearing up for the launch of IP CDMA service that offers up to 3.1 Mbps bandwidth. NT is preparing to distribute 200,000 WiMAX lines and add 2 million EVDO users in the next one year.
Despite rise in revenue in fiscal year 2011/12, NT´s average revenue per user (ARPU) of all the voice services has gone down. According to NT, its customers spent Rs 63 less per month in voice service compared to a year ago. However, its earning from data is increasing. “We can no longer rely on voice telephony only,” NT Spokesperson Gunakeshari Pradhan said. “That is why we are putting our focus on data and other value added services.”
Private operator Ncell is also working to provide its customers better data service. “We will continue to expand infrastructure in order to ensure better data connectivity,” said Koirala. “We are waiting for NTA approval to launch Long-Term Evolution (LTE) - a 4G telecommunications service.”
Ncell had approached the NTA for frequency to test LTE network a year ago.
WHAT MAKES DATA EXPENSIVE
Nepali telecom operators have introduced the latest mobile technology in Nepal. However, they have been failing to lower data price in line with the international market.
Ananda Raj Khanal, NTA director, said the main reason behind high data tariff in Nepal is the costlier bandwidth. “The bandwidth has to go a long way to other countries that host servers. This makes data expensive in Nepal compared to the country where content originates,” he said, adding: “Migration from traditional technology to broadband is costlier.”
Though existing IT Policy envisages enhancing content production at the local level, it has yet to be implemented.
Ncell´s Koirala said revenue from data is still low as only a small portion of the population is tech-friendly. “Return from data service is nominal compared to the investment made. That is why we are not being able to reduce data tariff,” she added. “We, however, are hopeful that cheaper Android phones will help expand the data market.”
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