Amid the ongoing row between the government and Internet Service Providers (ISPs) regarding the payment of controversial charges, Nepali people experienced a massive disturbance in internet services on Thursday afternoon.

Nepali ISPs have failed to clear dues with Indian bandwidth providers as a result of the years-long row, leaving the Indian companies to disrupt their services on Thursday afternoon. The ISPs stated that the Indian bandwidth providing companies, citing delayed payment by Nepali internet-related companies, disrupted their services to Nepali customers.

The government and ISPs have been on a warpath for the past few years. The government insists that ISPs clear their backlog payments on non-telecommunication services, including web service, co-location, hosted service, disaster recovery, managed service, data center, and cloud service. However, ISPs argue against paying for non-telecommunication components, stating it is against the law.

This comes amid the parliamentary Public Accounts Committee ordering the government to exempt ISPs from taxes on non-telecommunication components a few years ago. Following the committee's intervention, the Nepal Telecommunication Authority (NTA) wrote to the Inland Revenue Department requesting ISPs not be subject to telecommunication charges for non-telecommunication services.

However, the Office of the Auditor General in its annual report urged the government to recover the dues under this heading, prompting the government to take necessary steps to resolve the issue. Following the report, the government instructed ISPs to clear the dues.

According to ISPs, they are yet to clear dues worth Rs 3 billion to Indian companies. The Ministry of Communication and Information Technology is said to be refusing to recommend the central bank release funds, citing the issue of pending dues.

"We have been urging Nepal Rastra Bank to provide necessary foreign currency to pay Indian companies. But the central bank is not releasing the amount, stating they need recommendations from the Ministry of Communication and Information Technology," said an ISP company official.

WorldLink Communications, one of the internet service providers, said that it upstream provider had disconnected their international links citing non-payment. "ISPs in Nepal have not been able to remit such payments as we are unable to obtain permission from the Nepal government for foreign exchange. We are trying our best to recover the service," the company said in a notice to its customers on Thursday.

Nepali ISPs buy 70 percent of their internet from Airtel. According to them, the Indian vendor has cautioned them to disrupt supply to Nepali companies unless dues are settled.

A customer of Vianet Communication Ltd informed that the company has sent apologies regarding the disruption in internet service to its customers, citing disruption by Indian bandwidth companies. The company also mentioned in its message that ISPs have been negotiating with Indian service providers Airtel and government authorities to resume services soon.

According to the Nepal Telecommunications Authority, there are 20 ISPs operating in the country, including state-owned Nepal Telecom, providing internet services to 9.10 million people.

By: Rajesh Khana