RTDF unused due to legal hurdles

KATHMANDU, March 30--Billions of rupees collected by the government from different telecom companies for the purpose of rural telecom development have remained idle due to various legal hurdles.


Nepal Telecommunications Authority (NTA) had formed the Rural Telecommunication Development Fund (RTDF) around one-and-a-half decades ago to develop, expand and operate telecom services in rural areas. So far, it has collected Rs 7.71 billion from the contribution of two per cent of the total annual income made by telecom companies and internet service providers (ISPs).

“Contributions to fund have been increasing remarkably in the last three years due to expansion in service and rising penetration rate of voice and data services. Yet, we have not been able to use the fund because of lack of clear legal provisions and absence of chairman at NTA,” said Purushottam Khanal, director at NTA. He added they are preparing to hire a consultant to conduct a study to determine the modalities for using the fund in rural telecom development and update the tender documents of ‘District Optical Fibre Network Programme’.

To implement the district optical fibre project, NTA had prepared the bidding documents two years ago. The government since long has been planning to utilise the resources of the RTDF in projects like district optical fibre and ‘Connect a School, Connect a Community’. Officials at NTA said the government had amended the Telecommunication Policy 2004 to pave way for the fund to utilise the money. But failure to incorporate the provision in the Telecommunications Act 1997 has prevented the fund from using the money collected so far.

Of the projects designed by the fund, the optical fibre project, planned originally to commence in 2009, aims to connect all 75 districts by laying optical fibre cable alongside proposed Mid-Hill Highway. The project was supposed to have been completed by 2014 and made available high speed internet at a cheaper price and bring down the cost of voice telephony by reducing the investment of telecom companies and ISPs in optical fibre infrastructures.

As of now, normally companies like Nepal Telecom (NT) and Ncell are extending their fibre connection separately to areas where they want to take their service. For example, NT has expanded its fibre connection to over three dozen districts so far. As per NTA, small telecom companies and ISPs are taking fibre links on lease from other companies and also from Nepal Electricity Authority that owns fibre cable infrastructure.

NTA said that in a bid to clear legal problems, the government last year had amended the telecom policy, paving the way for using the RTDF money for development of infrastructures such as telecom tower, broadband network and optical fibre. The policy had also made a provision of a committee under the coordination of the NTA chairman to use the resources of the fund, select projects, set priorities and carry out required monitoring. However, the government has not formed a committee, as provisioned, so far.

The committee comprises joint secretary level officials from National Planning Commission, Ministry of Finance, and Ministry of Information and Communications (MoIC). An official at MoIC said that the committee was not formed as a case filed against the appointment of NTA Chairman Digambar Jha, is under consideration of Supreme Court for last 15 months. He also added that even when committee becomes effective, it will be difficult to use RTDF money for infrastructure development without amending telecom law as per amended telecom policy.

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