Nepal | September 25, 2020

Cable operators seek clean feed policy for over-the-top apps

Billions of rupees going out of Nepal every month, but the govt gets nothing in the name of taxes

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Cable operators have demanded that clean feed (advertisement-free content) policy be implemented for over-the-top apps that rake in billions of rupees without paying any tax to the government.

Though discussion on implementing the clean feed policy in foreign television channels has been going on for a long time, it has not been implemented yet. The government is preparing to fully implement the clean feed policy after July 16. Accordingly, the government has written to cable operators to submit details of foreign channels they broadcast to the Ministry of Communications and Information Technology within 15 days of the opening of the lockdown.

It is the first time cable operators have pointed out the need to implement clean feed policy even for OTT apps that deliver video content.

The OTT apps allow users to watch videos on mobile phones, tablets and smart TVs through the internet instead of the traditional means of distributing video content, such as satellite or cable.

Cable operators have complained that billions of rupees is leaving the country and the government is not collecting even a single rupee from that revenue.

Shiva Prasad Niraula, executive director of Digital System of Nepal, said half a dozen such apps that distribute video content are illegally taking billions of rupees abroad from Nepal. He claims that such apps have added more than 250,000 new users in Nepal during the lockdown period alone.

Nepali television channels have been enlisting the help of cable and satellite-based digital television broadcasting service providers to deliver such video content to customers.

Mobile applications of those channels have also been launched by some television channels. But apart from this, Nepali television operators have not been able to bring any separate OTT app so far.

On mobile apps of television channels subscribers can only watch content that is broadcast on the respective channels, while OTT apps allow users to watch online video content.

The government has been doing groundwork for a long time to implement clean feed policy targeting foreign channels.

However, while doing so, foreign channels may not provide downlinks in Nepal and cable operators will not be able to save their business by showing only Nepali channels.

The same businesses have now raised their voices in favour of clean feed policy for TV channels, as well as OTT apps.

Such video apps, which are registered in India, China and other countries and are expanding their business by paying taxes in countries where they are registered are doing big business in Nepal as well, but the government has not been able to regulate them to collect due taxes. Cable operators say the government should receive taxes for the business conducted in Nepal.

“We are neither anti-internet nor anti-technology,”

Niraula said, adding, however, the government should formulate necessary laws to regulate OTT apps and make an arrangement for them to be registered in Nepal.

For example, Netflix alone has an estimated 500,000 users in Nepal. It has been collecting Rs 500 to Rs 2,000 monthly from a single user, according to Niraula. Netflix alone is taking more than Rs 250 million a month even though it charges only Rs 500 per person on an average, he said. Some cable operators say Netflix is taking away Rs 500 million a month from Nepal.

As the number of users of other apps, including Amazon Prime Video and iFlix, is also increasing in Nepal, it seems that millions of rupees will be leaving Nepal in the coming days without any benefit to the government.

Earlier in a press briefing, Minister of Communications and Information Technology Yubaraj Khatiwada, who is also the finance minister, had said the government would implement clean feed policy targeting TV channels from the upcoming fiscal and formulate necessary laws to govern OTT apps as soon as possible.

A version of this article appears in e-paper on June 22, 2020, of The Himalayan Times.

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