Nepal’s 5G trials have been thrown into disarray as geopolitics causes planned tests in four provinces to be halted, while the progress report of ongoing tests in three provinces remains unknown.

Analysts say the country's move to fifth generation mobile technology could be put back by years as a result.

State-owned company Nepal Telecom has been conducting internal 5G trials in Babarmahal and Sundhara in Bagmati, Pokhara in Gandaki and Birgunj in Madhesh, and was planning to extend the tests to the other four provinces.

But officials say the tryout cannot be done because a licence to import equipment has been denied.

Nepal Telecom plans to obtain the equipment from two Chinese companies, Huawei and ZTE, which apparently has raised concerns among other powers, analysts said.

“We had written to the Nepal Telecommunications Authority last November asking for a permit to import equipment for the 5G trials. There has been no response,” said Shobhan Adhikari, spokesperson for Nepal Telecom.

“We cannot import the equipment until we get the licence,” Adhikari said.

But Achyuta Nand Mishra, deputy director of the Nepal Telecommunications Authority, says they have already sent an approval letter to Nepal Telecom allowing it to import the materials.

"We have received no such letter. If we had received the approval, we would have already imported the equipment,” Adhikari said.

On November 22, 2021, Nepal Telecom received the spectrum allotment and trial permission from the regulator to conduct 5G trials. Subsequently, it formed a task force in mid-December.

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

The last time Nepal Telecom announced the start of 5G trials in public places was during the company’s anniversary on February 5. But it deferred the plan.

Analysts say the 5G trial is being pushed around like a piece on a geopolitical chessboard.

“Globally, 5G has become a matter of geopolitics and competition in data systems and security. The big players—the United States, India and China—are engaged in a fierce competition which has deadlocked 5G trials in Nepal,” said foreign policy expert Vijay Kant Karna.

“Huawei's cyber security and data security systems have been questioned globally. For this reason, the US and India may have expressed concern over the 5G trials in Nepal,” said Karna, a former Nepali ambassador to Denmark.

Unnamed officials at the American and Indian embassies told the Post that they were concerned about the Nepal government allowing the Chinese companies to conduct the 5G tests without going through a competitive bidding process.

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

CCSI would work on the radio access network while ZTE would install the core network.

In October 2018, Nepal Telecom invited global bids to expand 4G service, and CCSI and ZTE were selected within two months of the bid submission. But the process came to a halt after a case was filed at the anti-graft body.

A year later in October 2019, the Commission for the Investigation of Abuse of Authority (CIAA) directed the Ministry of Communications and Information Technology to go ahead with the plan.

The government has also contracted the same company to continue the 5G trial, which some officials say was a violation of the public procurement rule.

Geopolitics in 5G has been heating up globally.

On July 2022, the Biden administration banned approvals of new telecommunications equipment from China’s Huawei Technologies and ZTE citing that they pose "an unacceptable risk" to US national security.

The move represented Washington's crackdown on the Chinese tech giants amid fears that Beijing could use them to spy on Americans, according to international news reports.

India has banned more than 250 Chinese apps including ByteDance’s TikTok, Tencent’s WeChat, Sina’a Weibo, Baidu Map, Alibaba’s US Browser and UC News and Community and Video Call apps from Xiaomi.

In response to the ban, Beijing said in February last year that it was "seriously concerned" about the actions India has taken against the Chinese companies.

In October 2011, according to a Times of India report, the Indian security establishment was watching with unease at Nepal Telecom’s decision to award the contract for the next-generation telecom network to two Chinese firms.

“The contract is given to the lowest bidder in the global competitive bidding process. From 2008 onwards, most of the service and equipment used in the mobile network have been from Huawei and ZTE because of the cost factor, and they match the technical specifications as well,” said a former Nepal Telecom official who did not wish to be named.

“The service and production costs of European and American companies are too high, including the cost of labour, experts and engineers compared to Chinese companies. If we accept higher priced contracts under the prevailing procurement law, our motive will come into question,” he said.

"For this reason, Chinese firms win most of the infrastructure and service contracts in Nepal. In some cases, the Chinese go even below the lowest bidding price set by the projects,” said insiders.

"In the initial days, equipment from Germany, Finland and Denmark, among other European nations, was preferred. But technology advancements in China and India have made the cost of equipment cheaper for countries like Nepal," said the former official.

Nepal is currently using Chinese technology for radio equipment and core systems for 2G, 3G and 4G.

Though the vendor of the core system and software is Chinese, the equipment is from American companies.

“So the system is mixed, and it is not complete domination of Chinese companies,” said an official.

Prime Minister Pushpa Kamal Dahal made an inspection of the Beijing-based digital company, Huawei, on September 25 during his visit to China.

According to Rastriya Samachar Samiti, the prime minister invited Chinese investors to invest in the information technology sector in Nepal, saying that the industry was still at an infant stage.

The prime minister said that Nepal’s information technology sector was one of the more lucrative businesses and urged Chinese investors to invest in this sector.

China has been involved in Nepal’s information technology projects for decades.

In September 2007, Nepal Telecom and China International Telecommunication Construction Corporation signed a contract to lay optical fibre cable and synchronous digital hierarchy (a group of fibre optic transmission rates that transport digital signals with different capacities) technology along the Araniko Highway under a grant assistance provided by the Chinese government.

Chinese firms have done most of the projects of Nepal Telecom, Ncell and the country’s data centre, including Nepal Television and Radio Nepal.

“Obviously, there is geopolitics surrounding the projects in Nepal. But it’s our policy to determine which technology or equipment we use,” said a former official of Nepal Telecom.

"Indian national policy says that they will not use Chinese technology and the operators can exclude Chinese vendors. Unless the government makes policy to exclude Chinese vendors, we cannot put the condition in the procurement process,” the official said.

"The government does not have a clear policy on 5G, and that may delay the rollout plans for years, may be a decade," the official added.