Nepal | November 21, 2019

Government mulls over ‘auto-pricing’ in internet

Sujan Dhungana

ISPs say the plan is ‘infeasible’

Kathmandu, July 18

The government is preparing to implement ‘auto-pricing mechanism’ in internet.

If this happens, internet price in Nepal will be determined on the basis of international bandwidth cost.

Minister for Information and Communications Gokul Baskota said that automatic pricing mechanism in internet cost is necessary as internet service providers (ISPs) in Nepal seem reluctant to cut internet fees though international bandwidth cost is constantly plummeting.

Citing that ISPs do not have logical right to increase internet fees despite government’s decision to levy 13 per cent telecommunications service charge (TSC), Baskota vowed to slash the internet fees which ISPs have raised recently.

“ISPs have been purchasing international bandwidth at minimal rates these days following continuous fall in global bandwidth cost. However, internet fees have remained the same in Nepal,” informed Baskota, adding that ISPs passing on the TSC to customers amid plummeting bandwidth cost is not justifiable.

As per Baskota, a directive will be issued within a week telling ISPs to adjust internet fees in line with the international bandwidth cost.

Min Prasad Aryal, spokesperson for Nepal Telecommunications Authority, informed that local ISPs are buying international bandwidth at around $8 per Mbps per month at present against almost $50 per Mbps per month some four years back.

Despite the government’s decision to levy TSC on internet services, ISPs were not necessarily required to hike internet fees, Aryal noted.

Citing that TSC on internet services will add to their financial burden, all ISPs including telecom firms, had raised internet fees by 14 per cent on all packages effective from Monday.

Since the past few days, the government is also facing public criticism for its decision to impose TSC on internet service, with number of protests held urging the government to roll back its decision.

Meanwhile, ISPs said that implementing auto pricing mechanism in internet price is infeasible as bandwidth price is determined in consensus between ISPs and the bandwidth company.

“It is due to plummeting bandwidth cost that ISPs today are able to provide high speed internet packages at cheaper rate,” said Sudheer Parajuli, former president of Internet Service Provider’s Association of Nepal.

Parajuli claimed that a 20Mbps monthly internet package today is available at almost Rs 1,200, though ISPs had been charging the same rate for 1Mbps monthly internet package a couple of years ago.

“Along with diverse e-content, ISPs have been providing high speed internet to customers instead of slashing internet fees amid plummeting broadband price,” he reasoned.

Moreover, ISPs claimed that the internet service available in Nepal, in terms of fees and speed, is one of the cheapest in the world.


A version of this article appears in print on July 19, 2018 of The Himalayan Times.


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