Market share of Ncell dwindling

Kathmandu, February 12

The market share of privately-owned telecom firm Ncell has fallen in recent months, shows the latest Management Information System report of Nepal Telecommunications Authority.

The MIS report of NTA shows that the market share of Ncell in the telecommunication industry of Nepal had come down by 1.5 percentage points between October 2018 and October 2019. While Ncell’s market share was recorded at 41 per cent in October 2018, it dropped to 39.5 per cent in October 2019.

Officials at NTA said Ncell had lost market share after other telecom firms, especially Nepal Telecom, provided more competitive rates or services in the domestic market.

As per the MIS report, market share of Nepal Telecom increased by 3.6 percentage points in the review period. Nepal Telecom’s market share had reached 55.6 per cent in October 2019.

The MIS report shows that the growth of GSM telephone service of Ncell in recent years has been tepid. Since October 2018, Ncell has managed to increase its GSM service users by less than half a million. On the other hand, GSM service users of Nepal Telecom surged by more than 2.5 million in the same period.

The gradual fall in market share has also affected Ncell’s earnings lately. According to the annual report of 2018-19 submitted by Ncell to NTA, the company’s income after tax was negative.

While Ncell’s income before tax was Rs 19.99 billion, it paid Rs 51.51 billion in taxes in the fiscal 2018-19. For comparison, the company’s income before tax in the preceding year stood at Rs 24.63 billion and it had paid Rs 6.60 billion in taxes.

NTA officials informed that along with the IAT, the company’s operation profit had also come down in the last fiscal year compared to the previous fiscal year.

Ncell’s operation profit in last fiscal was Rs 20.35 billion, which was down 19.21 per cent compared to Rs 25.19 billion in fiscal 2017-18.

Nevertheless, Ncell still claims to be the market leader in Nepal’s telecommunication industry.

Issuing a statement in response to the queries put forth by THT, it said, “In the context of cellular mobile service penetration rate already exceeding 140 per cent, Ncell serves over 16 million subscribers today and the company continues to focus on providing quality and reliable services.”

Ncell has also claimed that it is still the market leader and number one telecom company, both in terms of annual revenue and subscriber market share.