The subscribers of the country’s two mobile service providers can hardly be said to be happy with what they are getting. If the litany list of complaints against the government-majority owned Nepal Telecom as well as Ncell, a public limited company, are anything to go by, both offer patchy services and at a rather stiff price. Perhaps this wouldn’t be so if there were more actors in play, whereby service providers would be forced to compete over service quality and price. The new Balendra Shah government seems to think so. Minister for Communication and Information Technology Bikram Timilsina has repeatedly spoken of the need for “one or even more” additional telecom operators. To study the matter, the Nepal Telecommunications Authority, the sector’s regulator, has formed a committee whose recommendations are now awaited. Yet this is an old story. Every time a new government takes office, there are discussions on licenses for new telecom operators. Studies are carried out, potential applicants identified, and elaborate reports prepared—but then nothing happens.

This suggests the presence of vested interests as well as infrastructure constraints. The existing players want to limit competition and lobby accordingly. Yet that is not the whole story. There are reasons to doubt the feasibility of having more telecom service providers. One is limited availability of radio frequency spectrum and rights-of-way for network infrastructure, both vital components for the entry of new players. In the current situation, the addition of telecom service providers could paradoxically worsen services rather than making them better. Yet we still believe the Shah government is right in exploring the entry of a third actor. If our infrastructure and regulations are inadequate, it is worth spending on them. Nepal is already falling dangerously behind in productive use of telecom services—and thus missing out on all the attendant benefits of rapid digitisation. To take just one example, with an average person using just 4GB a month, Nepal has the lowest data consumption rate in South Asia. With better infrastructure and a more robust regulatory framework, the sector can be opened up to other players. In this new environment of healthy competition, the entry of more players can boost the quality of services on offer as well as people’s adoption rates.

Again, just as has been happening over the past two decades or so, vested interests will try to game the system. Considering the enormous sums involved—last fiscal year, Nepal Telecom brought in Rs 38.7 billion in revenue—there must be close oversight of the liberalisation process from the Prime Minister’s Office. Prime Minister Shah should himself ensure that none of his Cabinet members or senior bureaucrats gets personally involved in shady telecom deals in this period of transition. For a government that came to office on the twin planks of clean governance and efficient service delivery, this sector offers the perfect platform to make good on its promises. If it can do so, the Shah government will be rightly credited for taking a major step towards Nepal’s digital transformation.