The lion king

Internet arms race cause for concern, says NTA


The Nepalese Telecommunications Authority has expressed deep concern over Internet service providers who themselves charge service charges or tariff rates without the authority’s approval.

The fierce competition to provide high internet speed and competitive rates among Internet Service Providers (ISPs) recently started after CG Net rocked the market in June this year when they launched 120Mbps internet service at only Rs999.

Surya Prasad Lamichhane, deputy director of the authority, said service providers should seek approval from the NTA before launching packages that offer more than 100 Mbps in the market. Right now, most ISPs have dramatically increased bandwidth, he said.

Sudhir Parajuli, president of the Nepalese Association of Internet Service Providers, said that in recent months, stiff competition can be seen in service packages over 100Mbps. “This competition is quite unhealthy in the market and the service providers seem to be focusing on increasing the number of customers rather than the quality of service,” Parajuli told the Post.

It appears that ISPs are competing with each other to introduce their service offering to secure customers before they are approved, Parajuli said, adding, but rules are rules and they must be followed.

However, Parajuli said that the ISPs can introduce the price of the higher speed to the market by notifying the authority. If the new package has been on the market for more than 90 days, written approval must be obtained from the NTA, he said.

Parajuli said the high-speed plans currently being introduced in the market have been on the market for less than 90 days.

“We have also introduced a 150 Mbps service package and we have already notified the authority,” said Parajuli who is also the chairman of Subisu Cable Net.

In accordance with Section 42 of the Telecommunications Act 1997 and the condition of license, the authority-approved telecommunications service provider must approve the service charges or tariffs for the service provided to the customer. The service providers can then only implement the fee after publication of a notice mentioning the date of approval of the tariffs.

“The Nepalese Telecommunications Authority has not been able to control and monitor the quality of ISPs and recently appears to only license and set prices for ISPs,” said Santosh Sigdel, founding president of Digital Rights Nepal, a rights group to strengthen civic space. and digital rights.

The authority might have put in place an approval process for ISPs before launching their new service in order to avoid cartels in the market and also to regulate the market in case the price goes up, Sigdel said.

Classic Tech, Vianet Communications and WorldLink Communications did not get approval from the NTA before they introduced their broadband internet service plans to the market, according to an official in the authority.

Publishing a notice on Friday, the authority said that currently Internet service providers (with email) apply a service charge by posting a notice on various social media, newspapers and official websites of the service providers without taking support service charges or approval of NTA tariffs.

“All telecommunications users and customers are urged to make payment for service charges and tariffs knowing only whether the service charges and tariffs are approved by the authority or not,” the NTA said in a notice. .

Lamichhane said customers can ask their service provider whether the service package has been approved or not.

The authority asked the service providers to implement the service charge by taking the approval of the NTA and posting a notice with the date of approval.

Service and price competition is a good thing, but in an era when customers are faced with slow and poor internet service, quality of service is a major concern, an industry insider said.

Sigdel said the quality of service is what ultimately matters. “The competitiveness of services does not reflect what is offered by Internet service providers,” he said.

To ensure the quality of service, the authority should prioritize it rather than waiting for customers to file service complaints, Sigdel added.

It is believed that having many players in the market will result in quality service at reasonable rates. “There is an absence of technical data that provides information on the quality of service in the country. Although competition for internet speed has increased in the market, a growing number of customers are not getting the promised internet speed because their internet is a shared service and gets bogged down at peak times, ”said Sigdel .

“We pay a high price for our Internet package and the tax rate applied to it is also costly, because there is not a lot of margin in this business. So the service providers operate after increasing the number of customers rather than the quality and margin, ”Parajuli said.

Currently, companies must pay 2 percent rural telecommunications development fund tax, 4 percent license fees, 13 percent telecommunications service charges, and import duties on telecommunications equipment. Internet service providers buy their bandwidth at $ 4-5 per Mbps.

According to the Affordability Report 2021 published by Alliance for Affordable Internet, Nepal ranks 7th in the Affordability Factors Index (ADI), with 55.66 points among the 10 least developed countries. The index is measured in two main policy groups: infrastructure and access rather than measuring actual broadband prices and affordability.

Likewise, Nepal ranks 37th out of 72 countries in the ADI, a jump of four places from 2020.