KATHMANDU, MAY 12
Although mobile penetration has increased by over 142 per cent, telecom companies are facing losses as subscribers increasingly opt for over-the-top (OTT) platforms. This trend has affected telecom operators, cutting their voice revenues.
According to Nepal Telecom Spokesperson Shoban Adhikari, NTC's net profit decreased by Rs 449 million in the third quarter of the current fiscal year.
"The increasing use of OTT platforms by users is eating away at the company's profits.
Moreover, the implementation of interconnection guidelines since February, impact of COVID-19 on tourists' movement, and delay in expansion of infrastructure can also be attributed to the decline in the company's revenue," he said.
He further said the ongoing war between Ukraine and Russia has also impacted the telecom sector.
Meanwhile, Ncell's revenue declined by 22.7 per cent in 2020 compared to 2019, with some improvements in 2021 'as we digitised our customer value-chain to be more resilient'.
While the company did not reveal the amount of revenue, it said in a statement that 'the pandemic has been a big lesson that taught us that engaging with customers digitally would have resulted in the business being more resilient'.
Even as OTT platforms are affecting their revenue growth, the telecom companies say there is no alternative to going digital and diversifying data usage in this day and age.
"Broadly, we are optimistic albeit cautious, that the economy will continue on a stable and positive trajectory in the period ahead, which will contribute to higher consumption from consumers," Ncell said.
With the rise in use of mobile phones, SIM distribution in the country crossed over 42 million as of January 2022. The Management Information System report published by Nepal Telecommunication Authority (NTA) shows that NTC has 23.25 million subscribers across the country.
Similarly, Ncell has 16.89 million subscribers, Smart Cell has 2.37 million, while others have 2,986 subscribers.
In terms of mobile broadband service, NTC has 9.99 million 3G subscribers and 9.30 million 4G subscribers.
Likewise, Ncell has over 1.95 million 3G subscribers and over 6.54 million 4G subscribers as per the report. Smart Cell has over 161,123 4G subscribers.
A version of this article appears in the print on May 13, 2022, of The Himalayan Times.
