KATHMANDU, OCT 31 -Rural internet service providers (ISP) have been vanishing from the scene after failing to compete with big companies that have reached their home turf. Recently, the Nepal Telecommunications Authority (NTA) scrapped the permits of three such rural ISPs after they went out of business .
The NTA has cancelled the operating licences of Mandabi Multipurpose Society Development Centre based in Daman, Hetauda; Samajik Nyayakalagi Sanchar Abhiyan of Argakhanchi and Pratidhwani Media based in Liwang, Rolpa. According to the NTA, there are now only two rural ISPs left - CIS Net Sanchar and Wireless Nepal.
NTA Spokesperson Kailash Prasad Neupane said that they had cancelled their permits as they failed to provide services. “We have been informed that they could not operate their services by competing with the big ISPs that have reached their locality,” he added. The authority issues licences to rural ISPs to provide data service in the villages.
As per the latest report of the authority, the data service penetration rate has reached 27 percent, and a majority of customers are mobile data users. As of mid-August 2013, the number of customers using data services amounted to 7.13 million, and 98.75 percent were users of NT, Ncell and UTL. The market share of other ISPs stands at a minuscule 1.25 percent.
There are an estimated four dozen ISPs in operation, but only around a dozen are visible in the market. NTA officials said rural ISPs were dying because of network expansion by Nepal Telecom and Ncell. They said that apart from mobile data and ADSL, other ISPs are also expanding their service areas offering their services at competitive rates.
During fiscal 2009-10, the NTA issued four licences to provide services as rural ISPs. This was the time when demand for internet service was increasing in rural areas and big ISPs had not yet reached those places.
According to NTA officials, not only rural ISPs but city-based companies too have been having a tough time competing with giants like Ncell and NT. As per the NTA’s records, it has issued 76 ISP licences including six for rural ISPs, and among them, 28 licences were cancelled as of the last fiscal year.
Many ISPs are still out of contact of the NTA, and they have not been submitting their annual financial reports. Based on the report, ISPs are required to contribute 2 percent of their annual income to the Rural Telecommunications Development Fund and 4 percent as royalty to the government.
Two months ago, Himal Technologies, an urban-based ISP, lost its operating licence after failing to renew it. Himal, had its registered office at Jaya Bageshwori, Kathmandu.
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