Kathmandu, March 31:

Two more telecom service providers — CG Telecom and City Mobile — are all set to start operations.

According to Nepal Telecommunication Authority (NTA), including mobile and landline Nepal has a total tele-density of around 20 per cent while 80 per cent of the population is still deprived of telecommunication facility. Thus, there is a huge scope for more telecom service providers to enter the Nepali market.

CG Telecom — promoted by the Chaudhary Group (CG) — is a Rs 10 million company that is planning to bring with it an Indian partner, Bharati Enterprises of the flagship brand Airtel.

However, NTA — the regulatory authority of telecomm service providers — said that until it invites a tender no new company can operate. “Until NTA publishes any tender notice to inviting companies to bid, no new company can operate,” said NTA director Ananda Raj Khanal.

According to him, any company willing to start telecommunication service has to go through competitive bidding and should pass the technology qualification criteria.

Currently there are three national players — Nepal Telecom (NT), Spice Nepal Pvt Ltd and United Telecom Ltd. NTA gave license to UTL in 2002 for its basic service operation while Spice Nepal got license in 2004 for mobile service. There are three more rural telecom operators — STM in the Eastern Development Region, Nepal Satellite Telecom in Western Development Region and Smart Tel — licensed under Telecommunication Act Sec 23(2).

Khanal added that NTA had received lots of applications but that did not mean that all would get the license. “NTA will first issue a tender notice for the bidding,” he said. The two companies ZTE and the Telisonera that entered the Nepali market some years before have registered their companies as foreign investors. “Foreign Direct Investment is allowed in telecom sector but only in a 80:20 ratio,” said Khanal.

A foreign company wanting to register itself has to go through the Foreign Investment Technology Act and Ministry of Industry must give permission , according to the Company Registrar Office. NT, Spice Nepal — the provider of Mero Mobile — and UTL — having limited mobility service are the major service providers.

Government-owned NT is the largest player with 3.43 million including landline (5,46,076 users), GSM mobile (22,25,707 users) and CDMA fixed and mobile (6,32,005 users) by the end of Poush.

The NT PSTN service has reached 73 districts wheras CDMA and GSM service is available in all 75 districts. However, UTL and Spice Nepal all are lined up for further service extension, with Spice Nepal planning its service extension to 5 million more customers.