Committee formed for feasibility study on new telco

KATHMANDU, DECEMBER 8: The government is conducting a feasibility study vis-a-vis the establishment of a new telecommunications service provider. The Nepal Telecommunications Authority (NTA) formed a dedicated committee to conduct this study.

The committee is led by Amber Sthapit, Director of the Regulation Department, and includes Santosh Paudel, Director of the Legal and Licensing Department; Deputy Directors Pradeep Paudyal and Sundar Paikurel; and Assistant Director Sunil Khatiwada. The committee has been given a 45-day deadline to complete its work.

The primary objective is to determine whether Nepal requires a third telecom operator. The government’s decision to begin this study reflects a recognized need for additional service providers. However, the NTA has clarified that any further steps will depend on the study’s findings. If the study concludes that a third operator is unnecessary, no additional actions will be taken.

The study will assess Nepal’s telecommunications market, the need for a new operator (mobile service provider), and the challenges faced by existing operators. While similar studies have been conducted in the past, this initiative will also review the performance and revenue of current operators over the last five years.

Based on the findings, a proposal will be prepared outlining how, when, and under what conditions a new operator can be introduced. To attract potential investors, the NTA is considering granting permissions for the commercial deployment of 5G services.

In the 2000s, telecom providers such as Smart Telecom, Hello Nepal, and CG Telecom entered the market. According to Section 22(1) of the Telecommunications Act, "Mero Mobile" (now Ncell) received a GSM cellular mobile service license in 2004. Later, in 2008, companies like Smart Telecom and Hello Nepal were granted licenses under Section 23(2) to provide services in rural areas, which were later upgraded to basic telecommunications service licenses.

For the first time since 2008, the NTA has been preparing to invite applications for new licenses. As per Section 22(1) of the Telecommunications Act, the NTA must publish a public notice with a deadline for license applications. Section 22(2) authorizes the NTA to issue additional licenses if deemed necessary. Furthermore, Section 23(2) allows the government to approve licenses based on the NTA’s recommendation by publishing a notice in the official gazette.

Currently, Nepal has only two active operators: Nepal Telecom and Ncell. Companies like CG Communications, Smart Telecom, Hello Nepal, and UTL have failed to sustain operations.