Nepal Telecom has been planning its 5G rollout for years, but the state-owned company keeps putting it off.

Experts say that 5G, which stands for fifth generation mobile technology, is expected to be roughly 10 times faster and to support 10 times more devices per square kilometre than its predecessor 4G.

The latest on the launch is that it “should be soon”, but officials say they have no definite date. “We are not in a position to say when,” said Ranjeet Lohia, deputy spokesperson for Nepal Telecom.

At one time, authorities had been scrambling to make Nepal the first country in South Asia to offer super fast connectivity. On November 22, 2021, Nepal Telecom received the spectrum allotment and trial permission from the regulator. It started preparations for 5G trials by forming a task force in mid-December.

The state-owned utility has made a habit of over-promising on the 5G rollout, industry insiders say.

Nepal Telecom has announced several launch dates for 5G trials, but they have always been postponed for no apparent reason.

In February 2019, Nepal Telecom had contracted two Chinese companies, Hong Kong-based China Communication Service International (CCSI) and ZTE, one of China’s leading telecom equipment manufacturers, for a Rs19 billion 4G expansion project throughout the country.

ZTE supplied core equipment, while CCSI supplied Huawei’s radios equipment The task of installing and testing 4G was entrusted to CCSI.

As part of the agreement, ZTE and Huawei would also provide equipment to conduct 5G trials for free.

As per a top source at Nepal Telecom, 5G tests have been delayed because the company has not paid the contractor for the 4G project.

A document obtained by the Post shows that on June 19, 2022, CCSI had written to Nepal Telecom requesting it to settle the outstanding bills.

“We have been reminding Nepal Telecom and reiterated in writing on different dates and verbally in almost all meetings about the critical financial situations that we are facing due to the development of fund deficit after the expenditure exceeded the budget allocated for those contracts,” the letter said.

“It led CCSI to face the Acute Project Financial Crisis impeding CCSI to move forward with the project implementation activities including operation and maintenance of services. We have also intimated Nepal Telecom in our previous letters that CCSI will not be liable for all the consequences that may arise due to the suspension of the works due to fund deficit,” the letter said.

CCSI said that after May 4, 2022, the processing of only two payment claims out of 20 pending payment claims has been completed.

The Post could not independently verify the actual outstanding payments.

Shobhan Adhikari, spokesperson for Nepal Telecom, denied CCSI's claim. “Non-payment to the supplier is baseless. We have already settled the payment issue.”

Nepal Telecom has been saying that it has not been able to begin 5G trials as there weren't adequate devices in the market that support the tests.

“We are still preparing for the tests as there are few devices in the market that can operate 5G at 2600 MHz frequency,” Adhikari said. But industry insiders say that is a baseless excuse.

At least two government officials (one retired) the Post spoke to suspect the 5G rollout may have been caught up in geopolitics. “Looking at global trends, perhaps there could be some American pressure as well,” said a retired senior Nepal Telecom official who refused to be identified.

Chinese networking giant Huawei has been banned in the United States, the European Union and the United Kingdom over fears that Beijing could piggyback on the technology and spy on user countries.

“Geopolitics in 5G? That’s baseless too,” said Adhikari.

Nepal Telecom had planned to launch 5G trials in January, but it was postponed again. The telecom utility then said the tests would begin after two weeks, but again nothing happened.

“We have been conducting 5G trials internally for the past two-three months before going public. But we don’t know when 5G trials will come to the public,” said Lohia.

The telecom regulator has allocated 2600 MHz frequency band to Nepal Telecom to conduct the trials.

The company plans to conduct trials in one location in each of the seven provinces. After the piloting is completed, it will issue a global tender to buy equipment for 5G. A cost analysis will also be done at that time.

There are some internal politics too. “There may be some political interest in the project,” said an official at a private telecom company.

The Nepal Telecommunications Authority has recommended to the Communication Ministry that the private sector too should be allocated 5G spectrum through a competitive process.

“As the secretary of the Communication Ministry chairs Nepal Telecom, it’s obvious he doesn’t want to bring the private sector on board for market competition,” said the official. “But competition will ultimately benefit customers.”

In September 2021, private telecom company Ncell wrote to the Nepal Telecommunications Authority seeking approval for 5G network trials. The regulator replied that the Radio Frequency Policy Determination Committee would review Ncell’s 5G plan, but there has been no response so far.

Ncell has been saying that the company can go for a public trial within six months of approval.

Gaurav Giri, joint secretary of the Ministry of Communication and Information Technology, said the telecom regulator had been urging Nepal Telecom to start trials for the public soon. “The company has also been saying that they are prepared for it.”

Private telecom service providers will be allowed to conduct 5G trials as soon as the spectrum price is determined. “As we have a technology-neutral policy, we do not differentiate between service providers,” he said.

Nepal Telecom was allocated the frequency for free being a state-owned company, but it is not possible to provide frequency for free to private telecom service providers, officials said.

As the government plans to hold a 5G spectrum auction, private operators said it may take another one-two years for them to get approval for trials.

There is still no working procedure to involve the private sector in the 5G project.

The 5G project was delayed right from the beginning. First, there was a delay in allocating spectrum with changes in government. During the Sher Bahadur Deuba administration, the Communication Ministry was without a minister for a long time.

"The Covid lockdowns appeared as a major obstacle because imports came to a total halt," said spokesperson Adhikari.

“Nepal Telecom has been delaying the launch of 5G. We have asked them the reason behind the delay,” said Ambar Sthapit, director of the Nepal Telecommunications Authority.

“The last time Nepal Telecom announced the start of 5G trials was during the company’s anniversary on February 5. It has deferred the plan,” Sthapit said. “The company has not reported to the authority about its next date.”

According to the latest management information system report of the authority, 95.79 percent of the total population uses mobile broadband in Nepal. That translates to 27.96 million subscribers.

Nepal Telecom has a total of 18.95 million mobile broadband users where 7.26 million are 3G users, 11.55 million are 4G users and 136,573 are EVDO users.

Similarly, Ncell has a total of 8.88 million mobile broadband users where 1.93 million are 3G users and 6.95 million are 4G users. Smart Telecom has a total of 127,551 subscribers to its 4G service.