Unlike Trai, Nepal Telecommunications Authority (NTA), the telecom regulator
of Nepal, in addition to the regulatory jurisdiction, is vested with a number of
powers: power to issue license for the operation of telecom services in the
country; power to assign spectrum under the broader spectrum policy formulated
by the radio frequency policy determination committee; power to collect and
disburse the USO Fund called the Rural Telecommunications Development Fund (RTDF);
and power to settle disputes between the operators, and between the operator and
consumers.
It is a general observation that Trai is performing its roles with limited
powers and under challenging circumstances. There are entities such as the
Department of Telecommunications responsible for licensing and spectrum
assignment and TDSAT for dispute settlement among telecom companies. The fact of
the matter is that India is the second largest telecom market in the world
lagging only behind China.
The obvious question would be to ask “If all the powers had been vested in
one single regulator, would the development of the telecom sector have been
better than now,” The answer is not easy. It is just a speculation.
History Beckons
NTA as the autonomous and independent telecom regulator of the Government of
Nepal was established in March 1998 under the provision of the
Telecommunications Act, 1997. In essence, NTA is one of the most powerful,
independent and autonomous telecom regulator in the world.
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| Source:picasaweb.google.com |
The telecom sector in Nepal has changed since NTA was established in 1998.
The incumbent Nepal Telecommunications Corporation (NTC) was the only operator
providing POTS and also operating the ILD. Three ISPs were operating under the
license issued by the Ministry of Information and Communications (MoIC). Before
any operator was licensed, NTC was providing both the basic telecommunications
service and cellular mobile service based on the GSM technology.
The first private operator to be brought into Nepal's telecom sector was
United Telecom (UTL), a joint venture company of MTNL, TCIL and VSNL India (now
Tata Communications) and Nepalese company called Nepal Ventures. It was issued
license on October 4, 2002 to provide the WLL based basic telecommunications
service. Later on limited mobility service was also allowed and finally roaming
was also allowed between the limited mobility service areas. Thus UTL become a
de facto cellular mobile operator based on the CDMA technology. By this time it
had a subscriber base of just over 1,20,000, comprising both FWT and HHT
customers.
The second operator to be licensed was Spice Nepal (SNPL). It got the license
to operate cellular mobile based on GSM technology on September 1, 2004. Thus
duopoly was established both in basic telecommunications service and mobile
service. SNPL has a subscriber base of more than 1.7 mn.
STM Telecom Sanchar, a rural telecom operator was licensed based on the least
subsidy scheme on November 21, 2003, to provide basic telecommunications service
in the designated 534 VDCs of the Eastern Development Region. Its jurisdiction
in terms of geographical coverage was extended to all the rural areas of Nepal.
It is also provided 2.4 MHz of bandwidth in the EGSM band for more economic
rollouts of rural telephony. STM has established more than 2,800 PCOs.
To provide at least two telephone lines in each of the VDCs that did not have
access to any form of telecommunications services, two more operators were
licensed. Nepal Satellite Telecommunications was awarded license on February 17,
2008 to commence its service from the Mid Western Development Region and then to
expand its services into far western and western development Region of the
country where there is no access to telecom services. Finally it could provide
service on a pan Nepal basis. Interestingly, it was assigned spectrum in the GSM
900, GSM 1800 and CDMA 800 MHz band.
Another rural telecom operator to be awarded license was Smart Tel. It got
the license on July 1, 2008 to provide targeted 398 VDCs of the four development
regions other than the Eastern Development Region. It has also assigned 2.4 MHz
in the GSM 900 MHz band. These two operators are yet to begin service.
The table provides glimpses of the current telecom sector status in terms of
the service providers and the subscriber number. The teledensity is also given.
In terms of the geographic coverage, the number of VDCs yet to be served with
any form of telecommunications service remains at 446.
 |
| The table provides glimpse of
the current telecom sector status in terms of the service providers and the
subscriber number. In terms of the geographic coverage, the number of VDCs
yet to be served with any form of telecommunications service remains at 446
|
Hurdles for Nepal
The telecom sector has seen a number of anomalies in the licensing, spectrum
allocation/assignment as well as sector regulation. Now NTA is facing a major
challenge in maintaining level playing field in the telecom sector introduced
through different licensing schemes. The license terms and conditions differ in
terms of license fee (one time), and renewal fees for some operators, the
license to be renewed first after ten years and then after five years and for
other operators the license has to be renewed after five years during the
license validity period, which is twenty-five years. Some operators paid a fixed
license fee as determined in the telecommunications regulations and some paid by
the competitive bidding.
There is a huge difference in such amounts, and this difference in entry
conditions but providing similar services, has significantly distorted the level
playing field in the Nepalese telecom sector. The other factor that has
distorted the level playing field is the assignment of spectrum and the spectrum
charge levied. Some operators do not pay spectrum fees while others do.
Operators who are licensed to operate rural telecommunications services along
with basic services are assigned cellular mobile spectrum in GSM, CDMA band. 3G
spectrum has been assigned to GSM operators as an evolution to the existing 2G,
without levying any additional fees. NTA has floated consultation paper for
spectrum re-framing but the feedback from operators holding significant amount
of spectrum is not encouraging in terms of achieving the results envisaged by
NTA.
Challenges for India
The challenge for India is not only to ensure the availability of reliable and
affordable telecommunications services, including broadband and VAS, to the
people at the bottom of the pyramid but also to ensure sustained growth through
the creation of a private sector friendly policy, and legal and regulatory
framework. Maintaining transparent, objective, professional, efficient and
independent decision making at various institutions and levels within the
institutions is a sine qua non for instilling confidence in the investors, both
public and private and domestic and foreign.
Recommendations
It cannot be generalized that an entity such as the regulator having all the
powers like issuance and revocation of license, assigning spectrum, issuing
directives, settlement of disputes between the operators, and imposing and
penalty for non compliance, can perform better in terms of connectivity, price,
quality of service and providing choice to the consumers in the telecom sector.
The clear, transparent, predictable, objective policy, legal and regulatory
framework for the telecom sector, and accountable and professional institutions
to carry out these functions are surely to perform better even though the powers
could be among various state entities.
Ananda Raj Khanal
The author is director and secretary Nepal Telecommunications Authority
vadmail@cybermedia.co.in
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