The Nepal Telecommunications Authority is extremely concerned about internet service providers imposing service charges or tariff rates without the authority’s approval.
The fierce battle among internet service providers (ISP) to provide fast internet speed and reasonable costs recently began when CG Net shocked the market in June this year when they released a 120 Mbps internet package for just Rs999.
According to Surya Prasad Lamichhane, the authority’s deputy director, service providers must seek approval from the NTA before introducing packages with speeds above 100 Mbps. Currently, most ISPs have significantly increased bandwidth, he said.
Sudhir Parajuli, head of the Internet Service Providers’ Association Nepal, stated that there has been fierce rivalry in service packages of more than 100 Mbps in recent months. “This market competition is rather unhealthy, and service providers appear to be more concerned with expanding the number of consumers than with improving the quality of service,” Parajuli told the Post.
It appears that ISPs compete to debut their service package to secure users before being licensed, according to Parajuli, who added that rules must be obeyed.
Parajuli, on the other hand, believes that by contacting the authorities, internet service providers can impose a fee for better speed in the market. If the new bundle has been on the market for more than 90 days, NTA must give written clearance, he said.
According to Parajuli, the high-speed bundles now on the market have only been available for less than 90 days.
“We’ve also introduced a 150 Mbps service package, and we’ve already alerted the authorities,” Parajuli, who is also the chairman of Subisu Cable Net, added.
The telecommunication service provider licensed by the authority is required to obtain permission of service charge or tariff rates for the service given to the customer under Article 42 of the Telecommunication Act, 1997, and the condition of license. After that, service providers can only apply the service charge after posting a notice stating the rate approval date.
“The Nepal Telecommunications Authority has been unable to oversee and monitor the quality of ISPs,” said Santosh Sigdel, founder and chairman of Digital Rights Nepal, an advocacy group dedicated to strengthening civic space and digital rights.
According to Sigdel, the government may have developed an approval process for ISPs before releasing their new service to avoid market cartelling and to regulate the market if the price becomes too high.
According to an NTA official, Classic Tech, Vianet Communications, and WorldLink Communications did not seek NTA approval before launching their high-speed internet service packages in the market.
The authority stated in a notice issued on Friday that internet (with e-mail) service providers are currently implementing service charges by publishing a notice on various social media platforms, newspapers, and official websites of service providers without seeking NTA approval for the service charge or tariff rate.
“All telecommunications users and customers are requested to make payment of service charge and tariff rates by only knowing whether the service charge and tariff rates have been approved by the authority or not,” the NTA stated in a notice.
Customers can question their service provider whether the service package has been approved or not, according to Lamichhane.
The authority has instructed service providers to implement the service charges after receiving approval from the NTA and issuing a notice stating the date of approval.
Competition in terms of service and price is a positive thing, but at a time when customers are dealing with poor and unreliable internet access, service quality is a key problem, according to an industry insider.
In the end, according to Sigdel, it is the quality of service that matters. “The competitiveness of the service does not represent what the internet service providers offer,” he said.
Instead of waiting for customers to file service complaints, the authority should prioritize service quality, according to Sigdel.
It is thought that having a large number of participants in the market will result in better service at more reasonable prices. “In the country, there is a lack of technological data that offers information on service quality. Despite the fact that internet speed competition has expanded in the market, an increasing percentage of consumers are not receiving the advertised internet speed since their internet is a shared service that slows down during peak hours, according to Sigdel.
“We pay a high amount for our internet package, and the tax rate on it is equally high, so there isn’t much room for profit in our industry.” As a result, service providers are focusing on growing their customer base rather than quality and margin,” Parajuli explained.
Companies must currently pay a 2% rural telecommunication development fund tax, a 4% royalty, a 13% telecommunication service charge, and an import tariff on telecommunications equipment. Internet service providers pay $4-5 per megabit per second (Mbps) for bandwidth.
Nepal is ranked 7th in the Affordability Drivers Index (ADI) among 10 least developed countries, according to the Alliance for Affordable Internet’s Affordability Report 2021. Rather than assessing actual broadband pricing and affordability, the index is divided into two policy groups: infrastructure and access.
In ADI, Nepal is ranked 37th out of 72 countries, up four spots from 2020.