Internet speed arms race cause for concern, NTA saysISPs are launching high-speed packages without approval and are focused on getting new customers rather than focusing on the quality of service.
The Nepal Telecommunications Authority has expressed its deep concern with internet service providers implementing service charges or tariff rates on their own without approval from the authority.
The stiff competition to provide high internet speed and competitive rates among internet service providers (ISP) recently started after CG Net shook the market in June this year when they launched with a 120 Mbps internet service at just Rs999.
Surya Prasad Lamichhane, deputy director of the authority said service providers need to seek approval from NTA before launching packages that offer over 100 Mbps in the market. At present, most ISPs have increased the bandwidth highly, he said.
Sudhir Parajuli, president of Internet Service Providers’ Association Nepal said that in the past few months, stiff competition can be observed in service packages on more than 100 Mbps. “This competition is quite unhealthy in the market and service providers seem focused on increasing the number of customers rather than focusing on the quality of service,” Parajuli told the Post.
It seems that ISPs compete to introduce their service package to secure customers before being approved, Parajuli said, adding, but rules are rules and they need to be followed.
However, Parajuli said that internet service providers can introduce the price for the higher speed in the market by informing the authority. If the new package has been in the market for more than 90 days, then written approval needs to be taken from NTA, he said.
Parajuli said that the high-speed packages currently being introduced in the market have been in the market for less than 90 days.
“We have also introduced a service package of 150 Mbps and we have already informed the authority,” said Parajuli who is also the chairman of Subisu Cable Net.
As per Article 42 of the Telecommunication Act, 1997 and the condition of license, the telecommunication service provider licensed by the authority needs to take approval of service charge or tariff rates for the service provided to the customer. The service providers then can implement the service charge only after publishing a notice mentioning the approval date of rates.
“Nepal Telecommunications Authority has not been able to control and monitor the quality of ISPs and seems to lately only provide a licence and fix the rates for ISPs,” said Santosh Sigdel, founder chairman of Digital Rights Nepal, an advocacy group to strengthen civic space and digital rights.
The authority might have implemented an approval process for ISPs before launching their new service to avoid cartelling in the market and also to regulate the market in case the price goes high, Sigdel said.
Classic Tech, Vianet Communications and WorldLink Communications have not taken approval from NTA before introducing their high-speed internet service packages in the market, as per an official in the authority.
Issuing a notice on Friday, the authority said that currently, internet (with e-mail) service providers are implementing service charges by publishing a notice on different social media, newspapers and official websites of service providers without taking service charge or tariff rate approval from the NTA.
“All the telecommunications users and customers are requested to make payment of service charge and tariff rates by only knowing whether or not the service charge and tariff rates are approved from the authority or not,” NTA said in a notice.
Lamichhane said that customers can ask their service provider whether the service package has been approved or not.
The authority has asked the service providers to implement the service charges by taking approval from the NTA and publishing a notice by mentioning the approval date.
The service and price competition is a good thing but at a time when customers are facing slow and weak internet service, the service quality is a major matter of concern, said an industry insider.
Sigdel said that the quality of service is what matters in the end. “The service competitiveness does not reflect what is offered by the internet service providers,” he said.
To ensure the quality of service, the authority should prioritise it rather than waiting for customers to make service complaints, Sigdel added.
It is believed that having many players in the market will result in quality service at reasonable rates. “There is an absence of technical data that provides information on the quality of service in the country. Though the internet speed competition has increased in the market, an increasing number of customers are not getting internet speed as promised as their internet is shared service and gets bogged down at peak time,” Sigdel said.
“We pay a high price for our internet package and the tax rate levied on it is also costly due to which there is not much margin in this business. So, service providers are running after increasing the number of customers rather than quality and margin,” Parajuli said.
Currently, companies have to pay 2 percent rural telecommunication development fund tax, 4 percent royalty, 13 percent telecommunication service charge and import duty on telecommunications equipment. Internet service providers buy their bandwidth at $4-5 per Mbps.
According to the Affordability Report 2021 published by Alliance for Affordable Internet, Nepal ranks 7th in the Affordability Drivers Index (ADI), scoring 55.66 points among 10 least developed countries. The index is measured in two main policy groups: infrastructure and access rather than measuring actual broadband prices and their affordability.
Similarly, Nepal ranks 37th among 72 countries in ADI, a jump of four spots from 2020.