Telecom penetration rate reaches 70pc

KATHMANDU, JAN 02 -Telecom service penetration rate in Nepal has reached 70 percent at the mid-November 2012. A total of 18.45 million population of the country now has access to telecom services, according to the Nepal Telecommunications Authority (NTA).

Of the total users, 16.37 million are the users of services offered by private sector telecom company Ncell and state-owned Nepal Telecom (NT), the latest Management Information System report of the NTA showed. The penetration rate on mobile service alone increased to 61.82 percent as a result of operators’ competition for market share.

In mid-November 2010, the country’s mobile penetration rate was at 31.56 percent. The market witnessed a rapid growth in subscriber base after the first quarter of 2010, with Ncell aggressively expanding its service after re-branding. As per NTA, Ncell and NT have 8.91 million and 8.22 million subscriber base, respectively, as of mid-November 2012.

In other telecom service segments, fixed line service, which is comparatively good in terms of service quality, is available to 3.14 percent of the total population of 26.49 million. Similarly, satellite/limited mobility services are subscribed by 4.67 percent. Limited mobility services are offered by United Telecom Limited, Smart Telecom, Nepal Satellite Telecom and STM Telecom.

Despite growth in its subscriber base, NT has lost 12 percent market share in the last two years due to its failure to implement new projects in time, while competitor Ncell embarked on a massive expansion drive. Ncell’s market share increased from 38 percent to 48 percent over the period.

The NTA report says NT’s market share dropped to 44 percent in mid-Nov 2012, from 56 percent two years ago. NTA officials said NT lagged behind mainly for its failure to provide service on demand like Ncell. However, they said the quality of service being offered by both the operators is below the benchmark.

According to NT, procedural delays in carrying out new projects affected the company’s market expansion plans. A senior NT official said the main reason for the sliding market share was the delay in the implementation of projects such as 10 million mobile lines. “We called a tender in August 2011 for this mega project, but the project has just entered the implementation phase. This is because we have to follow all the norms being a state-owned entity,” the official added.

NT plans to start distributing new mobile lines under the 10 million lines project within the next five months. The company has already awarded package B (4.8 million lines) to Chinese telecomequipment vendor Huawei Technologies. It is also all set to sign a contract for package A (5.2 million lines) with the same vendor.