Nepal | June 24, 2019

Internet in Nepal: Making it affordable

Bikram Shrestha

While there is a need to dismantle the syndicate existing in the internet market in Nepal, there is also a need to introduce several other measures, including awareness among users, to make internet affordable

Illustration: Ratna Sagar Shrestha/THT

The government levied Telecommunication Service Charge (TSC) on use of internet effective from the start of the current fiscal year. This 13 per cent TSC on internet is in addition to the existing 13 percent Value Added Tax (VAT). The decision to increase tax met with severe criticism from users and stakeholders. Stakeholders like the Internet Society Nepal, Freedom Forum, ISP Association of Nepal (ISPAN) raised the issue formally and end-users took to social networking sites to criticise the government move.

Following the backlash, the government formed a committee, also comprising the representatives from ISPAN, and later issued a press release saying that there “will be no increase” in the cost of the internet due to TSC charge.

However, the story is not over yet, as the TSC is still there and it applies to the use of internet. So the question is whether this temporary settlement is adequate to address the issue of affordable internet in Nepal.

Of the 29 million population of Nepal, around 50.32 per cent have access to internet services.

According to a recent MIS report (June 2018), published by the Nepal Telecom Authority (NTA), 10.23 per cent of population have access to fixed broadband (wired), 1.10 per cent have access to fixed broadband (wireless) and the remaining 89 per cent subscribers use mobile internet. It is very interesting to know that the decision made by the government not to increase cost of internet due to the TSC applies only to the fixed broadband and not to the mobile internet; whereas around 90 per cent of the entire internet users are dependent on mobile internet.

Current scenario in Nepal is that internet arrangement is on B2B (business-to-business) basis. The ISPs (internet service providers) are private sector entities hence it is but obvious that they are always driven by the profit.

It seems there are only two or three parties involved in bringing internet to Nepal from India. While there is nothing wrong for the private sector entities when they try to make profit, the problem arises when the entire business smacks of profiteering. When a handful of parties or companies are involved in a particular business, chances of cartel or syndicate are high. In this scenario, these companies fix the price through their mutual understanding only focusing on making high profit and ignoring the service and the costs that end-users have to pay. As we stand today, chances of internet cost coming down for end-users are very low, as the parties or companies involved are less likely to reduce the price.

Expensive internet has recently been a major concern in Nepal, as we are set to pay more for internet at a time when the prices are going down across the world. At this point, the government can play a crucial role. A G2G (government-to-government) initiative could help in ensuring that citizens get fast internet services at an affordable price. There are two major arrangements that the government can undertake.

The first is having an arrangement for direct access to submarine cable at Mumbai or Chennai landing point. The second arrangement is making provisions for connecting with Hong Kong data centre via China. Further, the government may also explore using the network of Indian railway connectivity.

In a recent development, the Nepal Telecom has taken initiatives to bring internet to Kathmandu from China via Kerung-Rasuwagadhi. This is an alternative route to connect Nepal through internet to the world.

Pricing of internet is not determined only by the international bandwidth price, as claimed by some. A number of other factors including management, manpower, operating cost, local internet exchange and local content also play a crucial role in determining the internet prices.

Additionally, there are huge investments in infrastructure to supply internet to end-users. All ISPs are expanding their own infrastructure with individual investment. Thus, the stakeholders need to consider and address these issues to make internet affordable for the general population.

The cost would come down if the government takes initiatives to build infrastructure and provide them on “sharing basis” to all ISPs. The other option could be ensuring a system in place (by the government) so that infrastructure built by a particular ISP are shared by others at a rational cost. Other ISPs can expand their infrastructure to other areas where internet is yet to reach.

This will also increase the presence of internet in every corner of the country.

Another issue that needs our attention is awareness among users about the internet ecosystem and how the internet actually works. Likewise, we also need to focus on quality of services.

At the global level, a UN-backed multi-stakeholder forum, such as World Summit on Information Society (WSIS) and Internet Governance Forum (IGF) discuss such issues at length.

In Nepal also, in 2017 Internet Society Nepal had organised the first Nepal Internet Governance Forum. Such programmes are important to promote multi-stakeholder mechanisms for better governance of internet.

Shrestha, immediate past president of Internet Society Nepal, is e-Banking & Information Security Officer (ISO) at Sanima Bank Limited

 


A version of this article appears in print on September 04, 2018 of The Himalayan Times.


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