1. NEPALESE
TELECOMMUNICATION INDUSTRY
Aditya Rijal
Faculty of Management Studies, BHU

2. HISTORY
 1913: First telephone lines installed
 1935: Telephone lines distributed to public
 1975: Nepal Telecommunication Corporation (NTC) established
 1995: Private players entry permitted; Optical fiber installed
 1998: Nepal Telecommunication Authority (regulatory body)
came into existence
 1999: GSM mobile service started
 2002: First private player (UTL) came into telecom sector with
CDMA service and Limited Mobility.
 2005: Another private player (Ncell) came into GSM sector;
monopoly ended in GSM sector as well
 2007: 3G service launched
 2013: 4th Generation Wimax technology launched

3. CURRENT SCENARIO
 Penetration Rate: 95.28% (Oct. 2014)
 People connected by telephone: 25.24 million out of 26.5
million population (Oct. 2014)
 Internet Penetration: 35.28%
 6 Telecom Companies Operational*
 Major Players: Nepal Telecom (NTC), Ncell**, UTL
 Market Share:
 Voice Telephony: Ncell 48%, NTC 45%,
 Data Services: NTC 54%, Ncell 44%
Source: MIS Report October 2014, Nepal Telecommunication Authority)

4. 5 Forces Analysis

5. Industry
Competiton
Strong
New Entrants
Huge Investment
Government
Regulation
Brand Loyalty &
Identity
Buyers
Low Influence on
Product’s Pricing
High Switching
Cost
Threats of
Substitutes
Switching Cost
Homogenous
Product
Bargaining Power
of Suppliers
Buyers dictate the
terms

6. ISSUES IN TELECOM SECTOR
 Issue of the basic and mobile License through
competitive bidding
 Cellular spectrum assignment for basic and rural
telecom service providers
 Development of scientific basis for spectrum/
Spectrum Management
 Expansion of rural service providers
 Enforcement of Quality of Service standards -
particularly in mobile service
 Inter network connection and pricing

7. ROADBLOCKS
 Poor network quality, specially outside major cities
 Legal Hindrances
 Oligopolistic Market Structure
 Political instability
 Difficult topography

8. ROAD AHEAD
 Further increased mobile penetration*
 Competition in terms of Web based and Value Added
Services
 Rural untapped market
 Increment in FDI and FIIs including from Non-Residential
Nepalese
 Increased competition among two of the major telecom
service providers, NTC and Ncell.
 LTE technology
 Strategic partnership

9. Thank You