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Mobile penetration up‚ subscription down

RAMESH SHRESTHA

KATHMANDU: Subscription of new mobile lines has declined with the penetration rate of voice service heading towards saturation.

The latest Nepal Telecommunications Authority figures show that telecom operators added fewer customers to its network this year, as telecom penetration rate rose to 86.82 per cent.

In the first seven months of the current fiscal year till mid-February, two mobile service providers, Nepal Telecom and Ncell, added 1.41 million new mobile subscribers, as against 1.54 million in the same period of the last fiscal, marking a drop of 8.44 per cent.

The decline in subscription is attributed to heavy growth in the subscriber base during the last five years supported by competition among telecom companies and decline in price of handsets over the period. Call tariff has dropped significantly and smart phones having multiple features are available for as little as Rs 5,000 in the domestic market.

According to the latest NTA report, voice telephony service, including fixed and mobile, was being used by 23 million subscribers, or 86.82 per cent of the total population, till mid-February. Mobile services (GSM and CDMA) were subscribed by 76.8 per cent of the country’s total population of 26.49 million during the same period.

Till 2008, the penetration rate of voice service stood at 15 per cent, and data penetration rate was below one per cent. Now the data penetration rate has crossed 30 per cent due to the rapid growth in the use of mobile internet like GPRS and 3G. Of the total 8.14 million internet subscribers, 95 per cent use mobile devices, including cell phones, tablets and laptops, to browse the internet.

Ananda Raj Khanal, acting chief of the NTA, said it was natural to see fewer people subscribing to mobile lines because the telephone penetration rate is growing. This means demand for voice service will gradually decline in the coming years, which will affect telecom operators’ revenue from voice service.

Already, signs of decline in average revenue per user can be seen. NT’s first-half report shows that its monthly APRU declined to Rs 228, as against Rs 382 five years ago.

“That is why the telecom companies have started focusing on data; and if they fail to come up with business models that best suit the changing market trend, it will be difficult for them to sustain,” Khanal said.

As such two of the leading telecom companies have begun focusing on expanding data service.

“As there is good demand, we have been launching packages and campaigns focusing on data,” said Milan Sharma, corporate communications expert of Ncell. Ncell’s revenue from data had soared by 76 per cent in 4th quarter of 2013, according to TeliaSonera, parent company of Ncell.

The state-owned company officials said even as there was fall in APRU from voice service, revenue from internet service was increasing.

Number crunching

• 86.82 per cent Nepalis own phones, compared to 15 per cent in 2008

• Subscription growth rate drops by 8.44 per cent

• Mobile services subscribed by 76.8 per cent

• 95 per cent of the total internet subscribers use mobile devices

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