Internet service providers in Nepal have announced they will stop selling and renewing internet packages offering speeds below 50 Mbps, prompting consumer advocates to demand that the decision be withdrawn.

The move comes just before the Dashain-Tihar festive season, when ISPs have traditionally offered discounts and other promotional packages. Consumer groups say removing the cheapest plans could put internet access beyond the reach of students, small businesses and low-income households.

The Internet Service Provider Association of Nepal (ISPAN) announced on October 2 that packages described as “affordable” and offering lower speeds would no longer be sold or renewed from October 5. It cited rising costs in international markets, high inflation, rising fuel and fibre prices, and increasing equipment costs driven by the expansion of artificial intelligence. 

ISPAN chair Sudhir Parajuli, who is also the founder of Subisu Cablenet, said on Monday that only about 30 percent of customers use packages below 50 Mbps. He said the number of devices connected to home networks and consumption of video content had increased, resulting in frequent complaints about slow internet. He also blamed resellers and franchise operators for buying low-bandwidth packages from ISPs and selling them to customers at higher prices.

“When too many devices run on a low-speed package, the connection inevitably slows down, and we were getting a lot of complaints,” Parajuli said. “Resellers were also buying cheaper, lower-bandwidth packages from ISPs and selling them to customers at higher prices. When the service suffered, it was the ISP that took the blame.”

The decision applies only to new purchases and renewals, he said. Existing customers can continue using their current packages until their validity period ends.

Parajuli said the rising dollar exchange rate and higher prices for routers and fibre had made low-cost packages increasingly difficult to sustain. ISPAN is also discussing ways to regulate resellers with the Nepal Telecommunications Authority, he said.

ISPAN maintains that prior approval from the regulator is required to introduce new tariffs but not to discontinue existing packages.

The regulator disagrees.

The Nepal Telecommunications Authority says providers may sell services only at approved tariff rates and cannot unilaterally remove or alter packages in a way that restricts consumers’ access. Tariffs must be reasonable and cost-based, said Min Prasad Aryal, the authority’s director and spokesperson. “Prior approval from the authority is mandatory for introducing new packages or discontinuing old ones,” Aryal said. “Service providers cannot unilaterally discontinue or alter packages below 50 Mbps without informing the authority or obtaining prior approval.”

Aryal said the authority had not received formal notice or an application for prior approval from service providers regarding the withdrawal of lower-speed packages. He warned that the regulator could investigate and take action if providers collude to withdraw lower-cost plans or force consumers to switch to more expensive packages.

The authority’s latest approved tariff list allows ISPs to offer home packages at speeds ranging from 10 to 40 Mbps. Some providers have approval to charge Rs498 to Rs850 a month, before tax, for 15 Mbps to 30 Mbps plans. Providers are required to publish their approved tariffs on their websites, but the authority and consumer groups say many have yet to fully comply.

Some providers have also pushed lower-speed plans out of view on their websites, prominently displaying packages of 200 Mbps or more instead.

Vianet’s website, for example, does not show the 50, 60, 75, 80 and 100 Mbps packages approved by the authority on July 20. Its homepage instead features 200, 400 and 600 Mbps plans. Subisu prominently advertises 200, 450 and 650 Mbps packages, while customers must call the company to enquire about its approved 50, 65 and 80 Mbps plans.

Bishnu Prasad Timilsina, general secretary of the Forum for Protection of Consumer Rights-Nepal, called the ISP decision an attack on consumer rights and an example of collusion among providers. “Providers cannot simply push people into more expensive plans,” he said. “Those who can afford them will manage, but students, farmers, small businesses and low-income households will feel the impact most.”

Customers previously paid around Rs900 to Rs1,000 a month for 20 Mbps or 30 Mbps plans, while some providers offered 15 Mbps to 30 Mbps packages for Rs550 to Rs997 before tax. With 50 Mbps now the minimum package offered by most providers, monthly costs will generally rise to about Rs1,100 to Rs1,200 before tax.

Parajuli said the higher cost should not be a significant burden, as customers paying Rs900 to Rs1,000 for 20 Mbps could get a 50 Mbps connection for only a few hundred rupees more, while getting faster service.

Digital rights and technology campaigner Monica Niroula said the policy could deepen Nepal’s existing digital divide.“Those who can afford it can install Wi-Fi at home and use the internet without much concern about cost. But many people rely on cheaper, lower-speed plans simply to stay connected,” she said. “This decision risks pricing them out of internet access altogether.”

The authority’s latest MIS report shows 3.56 million fixed broadband subscriptions in Nepal, with coverage reaching 53.4 percent of the population. WorldLink Communications leads the market with 1.12 million subscribers, or 31.22 percent, followed by Nepal Telecom with 402,132, Vianet with 380,937, DishHome with 374,628, Classic Tech with 300,653 and Subisu with 272,270.

Consumer advocates say the withdrawal of low-cost plans by major ISPs risks widening Nepal’s digital divide and putting basic internet access out of reach for low-income users. “If the government’s goal is digital transformation, everyone must be able to get online,” Niroula said. “It needs to ensure that people who cannot afford higher charges are not priced out of internet access.”