Minister for Communication and Information Technology, Prithvi Subba Gurung, has strongly criticized the Nepal Telecommunications Authority (NTA) for its weak regulatory role and sluggish capital expenditure.

Speaking at the 27th anniversary of the NTA on Tuesday, Minister Gurung directly questioned the leadership of Chairman Bhupendra Bhandari and the Board of Directors over their inefficiency in implementing key telecom and internet infrastructure projects.

Capital Expenditure in Crisis

Minister Gurung pointed out that with only four months remaining in the fiscal year, the NTA has failed to utilize its allocated budget effectively. He raised concerns over the authority’s inability to implement telecom expansion and digital connectivity projects, which are crucial for Nepal’s technological growth.

“The capital expenditure of the authority is extremely weak. When will the actual spending happen? So far, there is no preparation to utilize the allocated budget,” Minister Gurung remarked.

Government’s Final Warning to Internet Service Providers

The government has issued a final one-month ultimatum to Internet Service Providers (ISPs) to clear outstanding dues. Minister Gurung warned that if payments are not made, the government will take legal action in line with existing policies. Following a judicial ruling in favor of the NTA, six ISPs still owe more than NPR 1 billion in dues.

“The era of injustice is coming to an end. The guilty will now be held accountable, while those who have been unfairly penalized will see justice,” Gurung stated, signaling strict action against non-compliant ISPs.

Nepal’s Telecom Market and Internet Price Wars

According to NTA Chairman Bhandari, telecom service coverage has reached 73% of Nepal’s geographical area. However, a 15% coverage gap remains between Nepal Telecom and Ncell, Nepal’s two major telecom operators. Currently, 9,163 telecom towers are in operation nationwide, but infrastructure expansion remains slow due to inefficient management.

The NTA also revealed that over the past year, 20 ISP licenses have been revoked. A year ago, 128 ISPs were registered, but the number has now dropped to 108, largely due to aggressive pricing competition in the internet sector.

Bhandari highlighted that internet bandwidth costs among ISPs vary from USD 1 to USD 5, creating an unfair pricing structure. “The price war has led to significant differences in internet costs, with smaller ISPs charging NPR 600-700, while larger ISPs charge NPR 900-1000 for similar services,” he explained.

Revenue, Spectrum Sales, and the Push for a Third Telecom Operator

Nepal’s telecom sector generates NPR 98 billion annually, with telecom operators contributing NPR 72 billion and ISPs NPR 26 billion. The NTA collects NPR 3.27 billion in royalties, which is expected to rise to NPR 3.8 billion this year.

Additionally, the Rural Telecommunications Development Fund (RTDF) is expected to increase from NPR 1.69 billion to NPR 1.9 billion, while spectrum sales are projected to generate NPR 4 billion, up from NPR 3.5 billion in previous years.

Despite these financial figures, Bhandari admitted that only 15% of available frequency spectrum is being utilized, highlighting the need for greater efficiency in Nepal’s telecom sector.

To break Nepal’s telecom duopoly, the NTA has completed a study on introducing a third telecom operator and is preparing to move forward with the plan, a move that could increase competition and improve service quality across the country.