After three years of halt, the much-awaited 5G frequency is set to be auctioned in Nepal.

“The telecom regulator is ready to allow 5G frequency, and we are waiting for service providers’ response,” said Pradip Paudyal, deputy director of Nepal Telecommunications Authority.

Paudyal, however, didn’t mention the auction date.

“We have decided to auction the 5G frequency and are preparing for it,” he said.

Paudyal said that to take part in the auction, service providers should clear all the dues they owe to the government.

5G, or fifth-generation mobile technology, offers 10 times faster internet speed than its predecessor 4G and supports 10 times more devices per square kilometre.

The state-owned phone company has announced several launch dates, but they have always been postponed for no apparent reason.

The 5G rollout was originally planned in 2021 but came to an abrupt halt, which insiders said was due to geopolitics.

American and Indian embassies’ officials recently 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.

Nepal Telecom has also been saying that there aren’t enough 5G compatible phones in Kathmandu and other cities to warrant launching the new technology. But records show that millions of mobile phones with advanced features have been imported in the past two years.

The rollout plan has been revived after the formation of the new government, which, according to insiders, is close to its northern neighbour, China, which has installed and supplied 5G equipment.

“We introduced the new frequency policy around four months ago. Under this policy, all frequencies will go into technology neutrality from the upcoming fiscal year 2024-25,” said Paudyal. Technology neutrality allows service providers to use any technology in a given frequency, he said.

Currently, there are two telecom service providers operating in the country—Telecom and Ncell.

According to the telecom regulator, service providers can introduce 5G technology using existing frequencies or new ones. The authority says it is prepared to provide new frequencies through auction.

Nepal Telecom was provided with a 2,600 Mhz frequency for the 5G trial. The authority provided the frequency for a year, and Nepal Telecom conducted an internal trial for around 2-3 months last October. It was said that Nepal Telecom would conduct a trial among the public, but that wasn’t meant to be.

The regulator has written to Nepal Telecom to submit a report on the 5G trial.

“Once it receives the report, the authority will proceed accordingly,” Paudyal said.

While the government said it is ready to introduce 5G technology, the service providers said that since building the 5G ecosystem requires huge investment and as the country’s current economic situation is not so good, the market is not ready for the new mobile technology.

It is estimated that service providers need to invest around Rs50-60 billion to implement 5G technology. Both the market and consumers are not ready for the technology, and there are device constraints, too.

According to service providers, though mobile phone users’ demands have been growing in Nepal, daily data usage remains very low.

Only two out of 10 Nepalis use mobile data regularly, according to Ncell, the private telecom provider.

Ncell said in a recent statement that the average monthly data consumption per customer is only 4GB, which is low compared to other neighbouring countries.

The telecom service providers are losing money and have outstanding dues due to the reduction in income.

When Ncell introduced 4G in 2017, its annual income was Rs58-59 billion, which has now declined to Rs33-35 billion.

Similarly, Nepal Telecom’s profit declined to Rs7.8 billion in the last fiscal year from Rs15.01 billion in 2017.

According to a report by Cable.co.uk, the mobile data price measured from June to September 2023 is $0.43, or Rs57.38. The average cost of 1GB of data in India is $0.16, $0.12 in Pakistan, $0.23 in Bangladesh, $0.25 in Sri Lanka, $0.71 in Bhutan, and $2.16 in the Maldives. Mobile data prices are expensive in Nepal compared to other South Asian countries.

Nepal Telecom concluded the 5G trial in four places in certain mobile sets to check whether the technology supports our network, said Hari Dhakal, spokesperson of Nepal Telecom.

“As it requires a huge investment to bring the technology, we need to look at the cost, market readiness, return and other factors. So it will be difficult for us to go to the public immediately and we will not bring it unless we are assured of all the factors.”

Jabbor Kayumov, CEO of Ncell, told a recent press meeting that after India, Ncell was looking to make Nepal the first country in South Asia to introduce 5G commercially. “But to get there, we need to take an important first step, and that is we need every Nepali to start using their mobile phones productively which means keeping mobile data always on.”

Also, the government needs to create favourable conditions and reform laws to bring the new technology, company insiders say.

For instance, a case involving Nepal Telecom and Ncell is under the court’s consideration. The government is forcefully asking telecom service providers to clear the frequency amount before the auction of 2,100 Mhz by bringing retrospective law, insiders say.

3G was introduced in Nepal in 2007 and 4G in 2017.

After the government announced an ‘economic decade’, digital economy topics are coming to the fore. “For a digital economy, digital transformation is necessary, which in turn calls for 5G technology. This is why the government has prioritised 5G,” Paudyal said.

According to the 61st annual report of the Auditor General, Nepal Telecom spent Rs18.43 million for the trial of 5G in the current fiscal year.

The audit has suggested that the company needs to be more effective in the implementation of 5G technology.