Unhealthy Competition on Teleco Sector

In this few decades information technology sector in Nepal has developed drastically. Rural places where the roads are not connected; there people are connected by mobile technology.  Till date 75 district of Nepal has reach over mobile service.

Based on recent survey of Nepal telecommunication Authority, there are more mobile users than total population of Nepal. According to MIS data, there are 2 crore, 94 lakh, 17 thousand and 9 hundred 7 mobile service users. Whereas, total population based on sensus on 2067, was 2 crore, 64 lakh, 94 thousand and 5 hundred 4. Data says there are almost 10 thousand mobile users added per day. Based on voice service, there are 3 crore, 99 lakh, 19 thousand and 5 hundred 55 total telephone users. Telephone diversification Nepal’s ‘teledensity’ has reached to 117.4.

Similarly, internet users are also gradually increasing. Authority reports internet users reached 9 crore and 37 lakhs in this Jestha. 59.68 percent of total population i.e. Half of the total population has access to internet. Government owned company NTC and private operated company Ncell has greater shares in both telephone and internet market. In telephone market NTC have 48 percent and Ncell have 45 percent share whereas in internet market NTC have 54 percent and Ncell have 42 percent share.

In Nepal NTC, UTL, Ncell, CG communication, Nepal satellite (hello) and Smart cell altogether there are 6 telephone service provider but 90 percent of market share in taken over by two big companies without any chances of competition. Even in internet market more than 90 percent of market share in taken by same companies creating monopoly in the market.

Even majority of Country’s population have reached to internet and telephone but there service provided isn’t satisfying enough. There is no enough competition so that quality also hasn’t improved this period. According to finance strategy, whichever companies provides cheap, quality and convenient service are meant to be headfirst in the market. In our cases, it’s our loss that there is no competition in the market. Government standard company NTC and private owned company Ncell have made their strong roots in rural sector of Nepal.

Government and its policy wishes for fair competition market. Authority provided telecommunication licence to UTL to join the competition to regulate fair competition. Smart Telecom had already got this licence at this point. CG sold their shareholding in attempt to gain this license. UTL providing service such as GSM, CDMA, PSTN, international talk telephone (ITT) etc. after getting unified licences. Before this, the licence was provided to NTC, Ncell, and Smart cell only. It was decided that Smart cell and UTL licences will be given at the same time, but Smart cell got licence and has already started their Network expansion in Kathmandu. Because UTL didn’t paid their due instalment so they didn’t got their licences. All companies got their licences under different conditions in different time. UTL have condition to operate expansion all over country within these 3 years to gain licences.

Now UTL and Smart Cell will give some pressure in competition to NTC and Ncell. UTL and Smart cell will be providing country’s standard GSM network which give some competition in market. This will help in quality improvement and also decreases in rate. This will give some advantage to service users.

Government is bringing ‘Level of Playing Field’ to increase competition, in which CG communication and Nepal Satellite (Hello) will be included. CG has requested for licences whereas NSTPL hasn’t even requested for this. CG and Hello will get unified licences when the required terms on the condition is fulfilled i.e. capital development and network expansion said Authority.

The customer will get different services when competition increases in market. This will also help improve healthy competition in market. deficiency of service such as tower issue, no on-time recharge, no on-time balance inquiry, no customer-care service, no enough speed in internet are some issues seen in mobile service. Service provider didn’t concentrate in fact of service because of market expansion plan. This in internet era, service provider should be concentrating in improving quality of data service. All companies should have healthy competition providing 3G and 4G services, and then only Nepalese information technology grows.

The rate of calls and internet, both are higher in Nepal. If all companies start to compete in same level then only the rate will be decreased. The call from one service provider to another service provider rate is relatively higher, which is main reason in increase on rate of interconnection. Service provider should be able to take care of smallest detail to fully satisfy the customers.

In context of neighbouring country, India, service-providers keeps middle-class people in their mind and have provision of recharge cards from Rs.5-10. They time to time issue plan and package such as SMS pack, call pack to their customers. Reliance under GO plan has issued LT 4G in India, in which service user can take advantage of free call service within 1 month of its issue. They have guaranteed themselves as the world’s cheapest rate in voice call service. They provide 1 MB of internet data in 5 paisa.

The companies in Nepal will sustain in the market when they successfully provide quality service based on the needs of service user. Otherwise, there is doubt that they will not exists in current market. Now the companies should also be moving toward healthy competition in market in order to sustain in the market.