The document proposes WiMAX as a solution for Nepal's broadband issues. It outlines Nepal's telecom landscape, noting low broadband penetration due to infrastructure challenges. WiMAX is presented as viable due to Nepal's terrain and underserved areas. Three business models are proposed: 1) A rural access project funded by ADB, 2) An independent WiMAX license, 3) A managed service partnership with Nepal Telecom. The document discusses each model and presents Tele Net as an experienced local partner well-positioned to implement WiMAX.

1. Proposal On WiMAX For Nepal To
Updated as on 23rd June, 2010
Tele Net Pvt. Ltd
5th Floor, Lucky Tower, Tripureshwor
Kathmandu, Nepal
Email: prasunjalan@gmail.com
Ph No: +977-1-4254546

2. Confidentiality
This document contains Trade Secrets, Commercial Information or other
proprietary information of TeleNet Private Limited is Privileged or Confidential. It is
considered exempt from disclosure under the provisions of the Freedom of
Information Act and/or other applicable statutes. It is submitted exclusively for
internal use for the purpose of determining whether to retain TeleNet on the
condition that its contents will not be released or otherwise utilized. This
information is not to be copied or distributed to persons outside the evaluation
process without the prior written consent of TeleNet

3. Table of Contents
I. Nepal- An Introduction
II. What Is The Telecom Status?
III. What Is The Broadband Status?
IV. Why WiMAX For Nepal?
V. What Are The Business Models?
VI. Proposed Structure Of Business
VII. Why Tele Net (Lucky Group)?
VIII. What Are The Expectations?
IX. Responsibility Matrix
X. Appendix

4. Nepal- An Introduction
• Nepal, is a landlocked country in South Asia and the world's youngest republic. It is
bordered to the north by China, and to the south, east, and west by India
• Population is around 30mn with youth contributing over 40% and Nepal is 41st most
populous country
• Divided in to 3 regions- Mountain, Hills and Terai, Nepal has 14 zonal administrations
• GDP of Nepal is estimated to be $31bn with 40% contribution by service sector and
annually Nepal has $2.6bn foreign remittance which leaves a deep pocket to an
average Nepali consumer to spend on luxurious goods
• The major trading centers in Nepal are Kathmandu, Birgunj, Pokahara, Narayanghat,
Biratnagar, Dharan and Butwal where most of the output is sold
• Nepal has 8 major entry and exit points with an International airport in Kathmandu
• Nepalese have a good appetite for luxurious brands and most of the major luxurious
cars, electronics, hotels, consumer brands are present here
• Country has 25% corporate tax and 13% VAT

5. What Is The Telecom Status?
• According to the Nepal Telecommunication Authority, Telecom circle in Nepal is divided into 2
areas- Whole Nepal and rural areas
• Curently there are two GSM operators in Nepal- Nepal Telecom and Ncell (Telia Sonera) with
combined subscriber base of 5.8mn. There are two CDMA operators, Nepal Telecom and UTL
(MTNL, VSNL JV) with combined subscribers base of 0.8mn. Also, there are 2 other operators in
rural areas which have obtained license to develop telecom in rural areas
Y-oY
Growth
35%

6. What Is The Broadband Status (1/2)?
• In Nepal, broadband users are estimated to be 1mn+ including wifi sharing, a total penetration of only 3.0%. VOIP
has a major dominance in outbound voice services in Nepal
• Currently there are 35+ ISPs but only 5-6 ISPs actively contributing to the broadband penetration
• The technology used are: dial up, ADSL, Cable Modem, radio link (wi fi),GPRS,EDGE,CDMA 1x, CDMA 1x EVDO,
3G(WCDMA), E1 Leased lines etc
• Key reasons for low penetration are
– lack of wire line infrastructure, still 50% of the Nepal is facing issues with connectivity
– Issues related to the cost of laying cable infrastructure
– Use of traditional methods of internet supply and very less investment in infrastructure upgrade
• Nepal is a mountainous country and considering the cost of laying fiber to home, WiMAX can greatly contribute to
broadband penetration.
• User size of GPRS compared to broadband validates the need of a reliable broadband service in Nepal
ADSL
Y-oY
Growth
109%
Overall
Y-oY
Growth
including
GPRS
407%

7. What Is The Broadband Status (2/2)?
Break-down of broadband market in Nepal
• Notes
– The above analysis excludes ADSL users of NTC
– In the analysis, it was found that the overall market is growing and expected to grow at 25-30% annually
– There is no official data available as in India about market segmentation and the above data has been
gathered through our relationship with various ISPs and internal research
– There is no government policy to identify a minimum speed to recognize a broadband conection

8. Why WiMAX For Nepal?
• This is one of the most important questions asked internationally
• Nepal is a hilly and mountainous region, considering this laying down fiber network as backhaul, at home is
commercially not feasible in at least 50% of the geography
• Elevation of buildings and target markets is not high compared to other nations, thus providing with netter line of
sight
• Many lucrative areas are underserved considering distance and spread of operation, after WiMAX implementation,
not only consumer but also wholesale business with banks, NGOs, INGOs, government entities, companies would
grow at increasing rates
• Current broadband penetration is very low and key reasons are more operational than market acceptance
• Users rely on CDMA or GSM GPRS for internet connectivity and Nepal Telecom even with better connectivity in
terms of broadband has not been able to fulfill the demand
• Tele medicine and schools connectivity, though very niche but can act as a monopoly market for WiMAX as
currently it is either being done through VSAT or compromising wifi
• Banks, corporate institutions require better and dedicated connectivity which is currently coming at high price due
to large distance between the ISPs POP and user location
• Nepal can really be an attractive market for WiMAX as the bandwidth price and penetration is much lower
compared to other South Asian countries where millions of dollar are paid for bandwidth and market is competitive
for target consumers
• Target market can be profiled and BTS can be installed
• In Nepal scenario, it would prove to be the most reliable technology for users considering the quality of fiber which
is over the air and not under ground and also scattered market can be served
• Our group is confident in delivering the right approach and assures returns which due to lack of database cannot
be presented in a attractive manner

9. What Are The Business Models? (1/3)
I. Rural Wireless Broadband Access:
This is a tender which would be floated by the Nepal Telecommunications Authority within a month under the
assistance of Asian Development Bank. Key features of the tender include
– The programe is being implemented under the grant assistance of ADB and has to be fully completed by
2015. Nepal has signed an agreement with ADB under which it will get a grant of $7.9mn for rural ICT
development
– 38 rural districts of Nepal is covered which is 50% of the total 75 districts of Nepal
– The company getting the license would get WiMAX spectrum and permission to operate WiMAX free of cost
– The licensee may operate all the possible services under the spectrum including voice, data, call
termination, STD, ISD and other services
– Company can offer services in pan Nepal after fulfilling the commitments in the districts mentioned
– Any of the parties involved in the tender needs to have a broadband service provider experience of atleast 5
years, our company created to run this service has been recently approved by the NTA and we expect our
partners to bring in this experience. In the case of no experience between any of the parties, this can be
brought within Nepal
– This tender provides an excellent opportunity to have a green field WiMAX set-up at a lower cost with
monitory assistance
– Key challenges under this would include inter connecting BTS considering few hilly and mountain regions.
The rural areas mentioned by the government would not generate immediate profits but its attractions
include e-goverenence project to be Implemented by the government under which our infrastructure would
be used; connecting banks ATMs, branches to the head office, which is currently facing a lot of connectivity
issues and after the project implementation it would involve increase in banking connectivity transactions;
others include tele-medicine, connecting schools, connecting NGOs and INGOs, which would be our target
customers

10. What Are The Business Models? (2/3)
II. Independent WiMAX operator under general licensing scheme
Government of Nepal is planning to issue WiMAX license to an independent operator. Key
features of this include
– After closing the process of awarding the rural wireless access broadband licensee, the
process would start to provide a single operator with spectrum to launch WiMAX service in
Nepal
– The company would not have any commitment to fulfill in rural areas and can launch the
service in any city
– Extra facilities such as voice, call termination, STD and ISD is not yet cleared but a company
can run VOIP for call origination only and not termination
– Key challenges include
• Large numbers of companies to participate in the bidding process
• Spectrum allocation and bandwidth is not yet clear
• It would involve similar issues faced by companies in India in terms of bidding process
and timeline
– However, we can explore this opportunity as well depending upon the market scenario and
discussions

11. What Are The Business Models? (3/3)
III. Managed Service Model with Nepal Telecommunication Corporation
This is the most attractive and feasibly business model for Nepal. NTC is an incumbent telecom
operator in Nepal similar to BSNL in India. The government of Nepal would also provide NTC with
permission to operate WiMAX in Nepal and also NTC already has 2.5GHz to run WiMAX. Key
features include
– NTC has an infrastructure ready which can be utilized for WiMAX
– They are present in all the 75 districts of Nepal and target customers can be achieved easily
– NTC is considered to the most reliable and has the best brand value in Nepal
– We have already proposed NTC for managed service model and awaiting clearance which
would not take much time, once a partner is finalized
– This business model is similar to the franchisee model being adopted by BSNL in India under
which the partner has to pay a certain percentage of revenue to NTC
– Our Company’s key strength lies in this business model and already providing manage
service to NTC for its entire VAS portfolio including 3G VAS
– Key challenges include, may be a time consuming in getting all the clearance but can be
managed considering the cost saving and already created brand
Our Company’s core strength lies in working with NTC and this business model can be
implemented sooner than any other WiMAX operator/model in Nepal

12. Proposed Structure Of Business
• Regarding the Business model, we propose the following three options which can be then discussed upon.
I. 50-50 JV between Tele Net (TN) and SOMA (SN)
– SOMA and Telenet to create a company wherein both the parties would invest equity and then take control of the
respective domain expertise (SOMA would take care of hardware and software and Tele Net all the activities
related to operation, marketing, selling, service, call center and liaising). Profits/loss would be shared equally.
II. SOMA to invest in Network Infrastructure and Tele Net in operation, marketing and selling.
– SOMA would take care of the connectivity and TN to take care of marketing and selling the product to the
consumer including investment in CPE and related manpower. Net revenue after NTC's share would be then
distributed equally between the parties
III. Both the parties to invest in the domain mentioned in point no:2
– Both the parties would recover their CAPEX and expenses during an agreed timeline and the surplus to be
distributed equally between the parties.
We understand SOMA as an expert technology partner and Tele Net as an expert retail partner. We would be glad to
know about your company's and industry's best practices in a managed service model and a proposal if required.
Please let us know about the options proposed by us and your company's views

13. Why Tele Net (Lucky Group)?
• We are one of the largest and most trusted business group in Nepal with presence in all the
sectors including manufacturing, trading and services
• We have excellent relationship with all the concerned authorities and command a good repute
• Our all major business have proved to be the most successful in Nepal such as we are the largest
mobile handsets company in Nepal within two years of operation with brands such as HTC, Spice
and our owned COLORS Mobiles
• We are the largest mobile VAS company in Nepal and providing services to NTC on an exclusive
basis
• We have our distribution network throughout Nepal with sales workforce
• Our organization is professionally run with decentralized departments and business heads
• We have already made a presentation to the government of Nepal including ministers to launch
WiMAX and would play a lead and key role in formulating WiMAX policies
• Our group’s core strength lies in trust, optimism, distribution network, repute and relationships
which makes us unique and one of the largest
• Companies internationally have been glad work with us recognized our business model, we work
with companies such as ZTE, Ericsson, Heisen and Spice Group for our operator business
• For further information, our website is www.luckygroupnepal.com

14. What Are The Expectations?
• From Tele Net • From Business Partner
– Strong partner in Nepal with wide – Strong partner with experience in
network and strong repute WiMAX
– Local expertise in terms of market – Technical expertise in terms of
knowledge, marketing, administration, technology, product experience,
relationships international market knowledge
– Networking, legal formalities, – Worked in any of the business models
coordination with local government proposed
– Long term commitment, optimist – Long term commitment, optimist
approach approach
– Leveraging distribution network, – Leveraging market , promotion and
sharing market knowledge, promotion product knowledge
of product, – Dedicated professional to educate and
– Making the business as one of the promote the product in initial phase
largest in its domain which is proved in – Support for RF planning, equipment
our other business domains deployment
– Advisory on suitable business model – Jointly selection of the best business
model

15. Appendix (1/3)
Current internet connectivity of major ISPs

16. Appendix (2/3)

17. Appendix (3/3)
Current internet connectivity of major ISPs