Nepal’s Telecomms Industry A Success Story


“Name one thing that has gone right since 1990,” challenged my pro-monarchy friend. He ticked off an impressive list of things that haven’t: traffic chaos, water shortages, load shedding and more.

But I had an answer for him: Telecommunications in Nepal has gone very much right during the last 20 years. Despite being a government monopoly for much of that time, communications in Nepal have grown at the second fastest rate in the region and improved vastly in quality.

In 1990 there were 57,000 telephones in the country. Ten years later, almost 250,000. And by the end of this year, the number will cross 835,000. That’s just fixed-line phones. The growth in mobile services is even greater. Since 1999 ten million Nepalis have subscribed.

Internet access has also expanded exponentially, from about 1,000 users in 1995 to over 30,000 in 2000 and 140,000 now. And since about eight million of those ten million mobile phones are data-capable, almost one-third of Nepalis now have access to the internet.

The progress has come largely because of good decisions by the Nepal Telecommunications Authority and the carriers. They planned for the future and introduced new services: first GSM, then WLL and CDMA; basic mobile data services and now 3G; cable and wireless internet, ADSL, and now city-wide Wifi in Kathmandu.

Opening the market to competition helped tremendously. Having multiple internet providers and several ways to get internet service drove costs down and speeds up. Allowing Spice, UTL and others to go up against NT in the mobile market meant that all the providers had to compete on service, quality and price.

And the sector has invested a huge amount of money, more than six billion rupees last year alone, sixty percent of that by Ncell. Both Ncell and NT are reinvesting over 25 percent of their profits back into their businesses.

Service has improved enormously. It used to be a nightmare to visit an NTC office to pay a bill or order a new line. What a difference now! It rarely takes me more than five minutes to pay for my ADSL connection, and I got a new 3G SIM card in 15 minutes last summer, with excellent technical support right there to help me set it up. Customers of Ncell and UTL tell me that those companies offer even better customer service.

And the days of “kaha paryo?” – “where have I reached?” – are long gone. The question was a logical start to phone calls in 1990, when crossed connections were common. Today the system works much, much better.

Yes, too many mobile calls don’t go through. And Nepal still lags far behind most of the world in telecommunications penetration and services. But put up against the many failures of the past 20 years, the telecommunications sector is a shining example that progress is possible.

My friend and I continue to disagree about whether democracy has ruined the country, but as he broke off our conversation to take an urgent call on his iPhone, he granted my point that at least one thing works better now than in the “good old days.”