The telecom sector regulator has incorporated a vague provision in the draft of a regulation, which, if approved, could be manipulated by authorities to stifle free competition in the telecom infrastructure services market.

A section in the draft of the Infrastructure Development and Sharing Regulation obtained by the Post says, once the licence to cater telecom infrastructure services is extended, similar permission will not be granted to another service provider for a period of five years. 

This provision smacks of an attempt to allow a firm to gain monopoly in telecom infrastructure services market, as authorities can extend such licence to a single firm, giving that company exclusive control over the infrastructure services sector-albeit the regulation allows authorities to scrap such licence if service quality is not up to the mark.

However, Chairman of the Nepal Telecommunications Authority (NTA) Digambar Jha claimed such a provision has not been included in the draft regulation, which, once approved, will bar country’s telecom service providers from developing infrastructure on their own. 

“The NTA holds the view that multiple players are required to deliver efficient services. Hence, the regulation has been prepared accordingly,” Jha said.

He further said that the Telecommunications Act “clearly states that multiple service providers will be required” to tap billions of rupees deposited in the Rural Telecommunication Development Fund (RTDF)”. 

The fund was created to improve quality of telecom services in remote parts of the country. “But if there is only a single player in the telecom infrastructure services market, we cannot make use of the fund to develop infrastructure in rural areas,” Jha said, adding, “There is huge demand for telecom infrastructure in rural parts of the country. So, the regulation cannot include provisions that contradict the spirit of the Act.” 

Jha’s response contradicts statement made by a senior NTA official privy to the matter. 

“Yes, the regulation includes a provision that allows the regulator to put a moratorium on licence extension for a period of five years,” the official said on condition of anonymity. “But that does not mean licence will be given to a single player.... Licences will be given to multiple players for a period of five years to ensure there is fair competition in the market.”

The official also informed that the licences will be given to service providers based on notice published in the official gazette and approval extended by the Cabinet.

Secretary of the Ministry of Information and Communication (MoIC) Mahendra Man Gurung told the Post that the ministry has yet to go through the draft regulation. “I haven’t seen the document yet. But if it contains ambiguous provisions, we will make necessary amendments,” Gurung said.

The draft regulation has been endorsed by the NTA’s board of directors and forwarded to the MoIC for approval. 

The Telecommunications Infrastructure Promotion Committee under the MoIC will go through the regulation before forwarding it to the Cabinet for approval.

The NTA had prepared the draft regulation after holding discussion for years.

The telecom sector regulator started preparing the regulation after service providers diverted focus on infrastructure development, leaving issues like quality of service at bay. Also, telecom infrastructure, according to the NTA, is being developed in a haphazard manner, resulting in waste of financial resources.

As per rough estimates, infrastructure eats up as much as 60 percent of the outlay of telecom companies. 

Infrastructure sharing is a concept wherein a number of service providers can use a common platform to offer services. After the implementation of the regulation, companies like Nepal Telecom, Ncell and UTL will have to use the same base transceiver stations and connection platforms to provide services. This means the company responsible for developing infrastructure will have a big responsibility to fulfil, making it a lucrative business.