NTA studies new operator license as telecom sector faces duopoly pressure

KATHMANDU: Nepal’s telecom regulator has concluded that a new mobile network operator license may be required as the competitive structure of the country’s telecommunications market has effectively narrowed to just two active companies, officials said.

The Nepal Telecommunications Authority (NTA) had earlier conducted a feasibility study indicating that additional licensing is possible to strengthen competition, but a formal recommendation and final decision are yet to be made.

NTA spokesperson Min Prasad Aryal said that although the country previously issued licenses to six operators to promote competition, only two companies remain effectively active in the market today.

“At present, only two companies are functioning effectively. To make services more competitive and innovative, there is a growing need for a third operator. The authority is discussing this issue,” Aryal said at an interaction organized by the Tech Journos Forum.

Market Contraction Raises Concerns

Aryal noted that several earlier licensed operators either failed to launch services or collapsed financially after entering the market.

Among the defunct or inactive operators are UTL, Smart Telecom, Hello Nepal, and CG Telecom, all of which have either ceased operations or failed to sustain commercial viability.

As a result, Nepal’s mobile telecom sector is now largely dominated by:

• Nepal Telecom
• Ncell

Despite their dominance, officials acknowledged that both companies are now facing constraints in making major capital investments required for next-generation expansion.

Former Regulator Questions Need for New License

Former acting chairman of the authority, Anand Raj Khanal, cautioned that issuing a new license may not resolve structural issues in the sector.

He argued that under the current regulatory and legal framework, even existing operators are struggling to sustain operations.

“Given the current situation, not only a new license but even the survival of the existing two operators is uncertain. Unless policies and regulatory pace improve, the sector cannot function effectively,” Khanal said.

He also raised doubts over whether market conditions truly justify introducing another operator at this stage.

Structural Issues in Telecom Sector

Stakeholders have long raised concerns over Nepal’s licensing and regulatory framework, which they say has not kept pace with rapid technological change.

Operators argue that while fixed-line services have shown relatively stable growth, mobile telecom companies face declining profitability despite increasing user demand.

High licensing and frequency fees, combined with low retail tariffs, have further squeezed margins in the sector.

Failed Entry Attempts Highlight Market Risks

Industry observers note that Nepal’s telecom market has seen repeated failed entry attempts over the past decade, with multiple operators unable to sustain operations after receiving licenses.

The collapse of several companies has effectively reduced the competitive field, leaving only the two dominant players in control of the sector.