First Business News Portal in English from Nepal
Nepal Telecom has been emphasizing on service diversification lately. The state-owned company has a dual role to play in delivering services remotely and competing with the private sector. Here is an excerpt from a conversation between Fiscal Nepal and Managing Director of the company Dilli Adhikari, who is completing his tenure this week.
During this time, we have accelerated many projects that were stalled since long. Before three years, there was no 4G except in the limited areas of Kathmandu and Pokhara. We have now expanded the 4G to 703 local levels in 77 districts. Today, Nepal Telecom leads in terms of 4G users. Similarly, we had only 12,000 FTTH lines at that time. Meanwhile, about 225,000 FTTH lines have been distributed so far. Previously, NT used to provide only internet in FTTH while now we provide internet and television together. Much work has also been done on infrastructure expansion. We have already installed about 1,200 BTS towers in many places including remote areas and we are in the process of installing about 250 additional towers. We have catered services to places where even 2G and 3G were not available. We are also in the process of laying 1,200 kilometers of optical fiber on the Mid-Hills Highway. Therefore, we have dragged NT out of situation where there were no projects and no services. Lately, profits of Nepal Telecom have also been increasing. NT also became the first service provider to address the Covid-19 pandemic.
We witnessed problems in project implementation due to inability to work in the field amidst the lockdown. Lockdown across different countries disturbed efficient supply of necessary equipment and it made project implementation and execution inconvenient. But the use of the internet increased as people had to stay at home. NT’s ADSL became effective when the service of some internet service providers turned out to be inefficient during the lockdown. From that point on, the message spread that NT’s internet is of good quality. This increased people’s attraction towards NT’s FTTH and 4G service. In result, it strengthened the services of the company.
Before the Covid-19 pandemic, voice telephones, international calls and financial revenues were a big part of our income, while that from data was limited. Meanwhile, all three sources were badly affected by the Covid-19 and it had a negative impact on our revenue as well. However, our data and voice revenue is growing as we continue to expand our services and as our customer base is growing. However, international calls and financial income have not been as high as expected. Due to the increase in data revenue, we were able to increase our operating income by Rs 1.5 billion in the last fiscal year and managed to increase it by 13-14 percent in the first quarter of the current fiscal year. Overall, the revenue from the non-core sector has shifted to the core sector, which is important to keep the organization sustainable.
As there has to be interconnection with many banks and payment gateway providers, the work of Namaste Pay is almost completed now. Now Nepal Telecom will market it with attractive plans. Namaste Pay is believed to play an important role in providing financial access to telecom customers and building a cashless society. In terms of VoLTE, customer’s mobile sets are not compatible with it though almost every place has access to the network. Number of customers is increasing as this service is now available in the new mobile phones. We are currently in the final stages of testing the service and NT will start commercial operation of VoLTE service soon.
We carry out such infrastructure works through contracts and monitoring of these projects is done by our regional offices. Thus, such projects do not affect our main work rather these projects will help us in improving our quality. In the case of laying optical fibre across Mid-Hill Highway, there is effective coordination at central level but not at the local level. The recent disruption in the international supply chain due to the Covid-19 and the local level lockdown have also caused problems. However, these obstacles are being removed gradually and the work of Package 1 will be completed within the current fiscal year. Many projects in the west have also been tendered.
We plan to connect one million FTTH lines in the next two years. So far, only 225,000 million lines have been connected. At present, digital network planning is ready for 1.1 million customers and network is ready for 600,000 customers. Our dream is to take NT’s FTTH to every home. In terms of competition, our quality is good now and we are focused on it. The networks we have built are sustainable and do not detract from the beauty of urbanization. Regarding competition, we compete with our own benchmarks that we have set, not with others.
We need strategic partners to make our services more competitive. Accordingly, we have already made recommendations to the Ministry of Finance through the Ministry of Communications and Information Technology to empower NT’s employees through management contract and technology transfer.
What are your suggestions to make the ‘increasing use of data’ the basis for sustainable and core revenue of NT?
We have now entered into an agreement with the Ministry of Federal Affairs and General Administration to provide 4G internet in local offices and schools across the country. Through that we can add value to many applications. Commercialization of the company can be further enhanced by integrating all the sectors under the government’s ‘Digital Nepal’ campaign through mobile broadband.
As a government company, NT has its own responsibilities. It must also provide services to people in remote areas at the same cost, whether by transporting equipment by helicopter or other means. It is the responsibility of NT to connect the people to the mainstream even if the company has to spend millions rupee though the return is less. The private sector does not have such an obligation. Thus, the state company must get concessions to go to every sector. As NT is for the service of the people rather than commercial purpose, we cannot be compared with the private sector.
Earlier, we had brought 10 million GSM line expansion project and it took seven years to complete. This is a smaller project compared to the ongoing 4G expansion project. At present, mega projects like 4G has achieved 95% progress in less than three years. We have succeeded in connecting the common man to the digital ecosystem through 4G. This is a matter of great pride. Similarly, we have succeeded in launching ‘Triple Play’ service through fiber. In the meantime, many infrastructures have been built. We have also introduced and implemented staff regulations for institutional reform. Overall, we have succeeded in laying the foundation for further progress of NT. However, we could not implement the provision that the government company competing with the private sector can make the procurement procedure and implement it after getting the approval from the Public Procurement Monitoring Office.
The new leadership must focus on maximizing the use of existing infrastructure. Our weakness is marketing and it should be done aggressively. It is always challenging to introduce new services. The new leadership should be able to recommend how to best implement 5G service in the context of Nepal, timely technology should be brought, investment should be diversified and the company’s resources should be maximized.
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