After a three-year hiatus, Nepal is set to auction the much-anticipated 5G frequencies. Pradip Paudyal, deputy director of the Nepal Telecommunications Authority (NTA), announced that the telecom regulator is ready to permit 5G frequencies and is awaiting responses from service providers. However, the auction date has not yet been specified. Paudyal emphasized that service providers must clear any outstanding dues to the government to participate in the auction.
5G technology promises internet speeds ten times faster than 4G and supports ten times more devices per square kilometer. The rollout of 5G in Nepal faced delays due to geopolitical issues and concerns from American and Indian embassies regarding Chinese companies conducting 5G tests without competitive bidding. Despite claims of insufficient 5G-compatible phones in Nepal, records show that millions of advanced mobile phones have been imported in the past two years.
The 5G plan was revived under the new government, which has close ties with China, the supplier of 5G equipment. Paudyal mentioned that the NTA introduced a new frequency policy four months ago, allowing technology neutrality, which permits service providers to use any technology within a given frequency.
Currently, Nepal Telecom and Ncell are the two telecom service providers in the country. They can introduce 5G using existing or new frequencies, with the NTA prepared to auction new frequencies. Nepal Telecom had conducted an internal 5G trial with a 2,600 MHz frequency provided by the NTA last year. The regulator has requested a report on the trial to proceed accordingly.
The economic challenges and significant investment required for 5G rollout, estimated at Rs50-60 billion, have made service providers cautious. The current economic climate, market readiness, and device constraints are major concerns. Ncell noted that only two out of ten Nepalis use mobile data regularly, with average monthly data consumption per customer at just 4GB, much lower than neighboring countries.
Service providers are also struggling financially, with Ncell’s annual income dropping from Rs58-59 billion in 2017 to Rs33-35 billion currently, and Nepal Telecom’s profit halving to Rs7.8 billion in the last fiscal year from Rs15.01 billion in 2017. Mobile data prices in Nepal are higher than in other South Asian countries, further complicating the situation.
Ncell’s CEO, Jabbor Kayumov, expressed the goal of making Nepal the first South Asian country to introduce 5G commercially after India. However, he stressed the need for increased mobile data usage and government support, including legal reforms, to facilitate the new technology.
Legal disputes, such as the ongoing case involving Nepal Telecom and Ncell over frequency fees, also need resolution. The government’s push for a digital economy, as part of its ‘economic decade’ initiative, underscores the importance of 5G for digital transformation. The Auditor General’s report highlighted the need for more effective implementation of 5G technology, with Nepal Telecom spending Rs18.43 million on 5G trials in the current fiscal year.
