After a three-year hiatus, the much-awaited 5G spectrum is set to be auctioned in Nepal.
“The telecom regulator is ready to grant permission for 5G frequencies and is waiting for the response of service providers,” said Pradip Paudyal, deputy director general of the Nepal Telecommunications Authority.
Paudial, however, did not mention the date of the auction.
“We have decided to auction 5G frequencies and we are preparing for that,” he said.
Paudial said that to participate in the auction, service providers would need to repay all debts owed to the government.
5G, the fifth generation mobile technology, will provide internet speeds 10 times faster than traditional 4G and support 10 times more devices per square kilometre.
The state-run telco has previously announced launch dates for the service on several occasions, but they have always been postponed without any clear reason.
The 5G rollout was initially planned for 2021 but was abruptly halted for geopolitical reasons, according to people familiar with the matter.
US and Indian embassy officials recently told The Post they were concerned that the Nepalese government had allowed a Chinese company to carry out 5G tests without going through a competitive bidding process.
Nepal Telecom also said there was a shortage of 5G-enabled phones in Kathmandu and other cities, making it not worthwhile to introduce the new technology, even though records show millions of phones with advanced features have been imported in the past two years.
The rollout plan was revived after a new administration took office, but officials said the new administration has close ties with northern neighbor China, which is installing and supplying 5G equipment.
“We introduced a new spectrum policy about four months ago, under which all spectrum will be technology neutral from 2024-25,” Paudyal said. Technology neutrality allows service providers to use any technology on a particular frequency, he said.
Currently, there are two telecommunication service providers operating in the country: Telecom and Ncell.
Service providers can deploy 5G technology using existing or new frequencies, according to the telecoms regulator, which has said it is open to offering new frequencies through auctions.
Nepal Telecom was provided with 2,600 MHz spectrum for 5G trial operation. The authorities provided the spectrum for one year and Nepal Telecom conducted internal trials for about two to three months in October last year. Nepal Telecom was expected to conduct the trial for the public, but that did not happen.
The regulator has written to Nepal Telecom to submit a report on 5G trials.
“Once the report is received, the department will act accordingly,” Paudiale said.
Though the government has said it is ready to deploy 5G technology, service providers said building a 5G ecosystem requires huge investments and the market is not ready to embrace the new mobile technology as the country’s current economic situation is not that good.
It is estimated that service providers will need to invest around INR 500-600 crore to deploy 5G technology. Both the market and consumers are not yet ready for the technology and are device constrained.
According to service providers, although demand is increasing among mobile phone users in Nepal, daily data usage still remains very low.
According to private telecommunications operator Ncell, only two in 10 Nepalis use mobile data regularly.
Ncell, in a recent statement, said the average monthly data consumption per customer is just 4GB, which is low compared to other neighbouring countries.
Communications service providers are suffering losses due to falling revenues and are left with unpaid bills.
When Ncell launched 4G in 2017, the company’s annual revenue was Rs 58-59 billion, but now it has fallen to Rs 33-35 billion.
Similarly, Nepal Telecom’s profits fell from Rs15.01 billion in 2017 to Rs7.8 billion last fiscal year.
According to a report by Cable.co.uk, mobile data tariffs from June to September 2023 will be $0.43 or Rs 57.38. The average cost of 1GB of data in India is $0.16, $0.12 in Pakistan, $0.23 in Bangladesh, $0.25 in Sri Lanka, $0.71 in Bhutan and $2.16 in Maldives. Mobile data tariffs in Nepal are expensive compared to other South Asian countries.
Nepal Telecom spokesman Hari Dhakal said the company has completed 5G trials at four locations with selected mobile sets to see if the technology would support Nepal’s network.
“The technology requires huge investments to deploy, so we need to consider costs, market readiness, benefits and other factors. Therefore, it will be difficult to make it publicly available anytime soon and we will not do so until all factors are certain.”
Ncell CEO Javor Kayumov said at a recent press conference that he wants Nepal to be the first South Asian country to commercially deploy 5G after India, “But to get there we need to take a crucial first step: getting every Nepali to start using their phone productively – keeping their mobile data always on.”
Business insiders also say governments need to create favorable conditions and revise laws to allow new technologies to be introduced.
For instance, a case involving Nepal Telecom and N-Cell is currently under consideration in court. The government is using retroactive legislation to force telecom service providers to clear spectrum volumes before the auction of 2,100 MHz, sources said.
3G was introduced in Nepal in 2007 and 4G in 2017.
The topic of digital economy has come to the forefront since the government announced the “Economic Decade.” “A digital economy requires digital transformation, and that requires 5G technology. This is why the government is prioritizing 5G,” Paudiale said.
According to the Auditor General’s 61st annual report, Nepal Telecom spent Rs 18.43 crore on 5G trials this fiscal year.
The audit suggested the company needed to be more effective in deploying 5G technology.
