To provide low-cost internet, ISPs deliver the internet in a shared package. While each consumer can expect a certain amount of bandwidth to be available to them, the sudden surge in usage means these expected allocations are not enough. With a fixed monthly fee for unlimited internet, demand for consumption has gone up abnormally, says Binay Bohara of Vianet.

Some of the smaller ISPs are poorly-equipped with limited technology and infrastructure to handle the growth in volume, and unable to handle the spike in demand. ISPs lack the means to check bandwidth entering a consumer’s router, making it difficult to fix issues.

Consumers are also generally unaware about internet speed and what affects it. Says telecommunications expert Anandaraj Khanal: “Since the internet package is shared, customers do not get the given amount of bandwidth on each and every device.”  

Some 80% of consumer complaints since the lockdown concern slow speed of connection and service. Then there is the cost, which has shot up with the addition of 13% Telecommunications Service Charge, 13% VAT and 4% royalty fees.

“Despite there being so many companies, the market has been unable to capitalise on the surge in demand,” says Bohara. 

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Customers seeking high-speed internet and using high-load apps are putting pressure on an already strained system, forcing ISPs to ‘import’ bandwidth from India. The dependence on Indian fibre optic corridors leaves Nepali connections vulnerable to failures, and with increased load, complaints regarding internet quality and service have gone up. 

Adds Bohara: “ISPs are struggling to accommodate increased bandwidth consumption by high-load apps such as TikTok and YouTube.”

Quantity over quality has been the trend in the Nepali internet market, saturated by hundreds of inactive Internet Service Providers (ISPs) offering no service even as demand booms during the lockdown.

Only 40 of 125 ISPs registered with Nepal Telecommunications Authority (NTA) have active internet users, of which only six are the main players in Nepal’s internet market. As of May, only 11 had submitted reports that confirmed their status as active ISPs.

Worldlink (368,787 users), Nepal Telecom (243, 947 users), Subisu (124,620 users), Classic Tech (120,907 users), Vianet (108,153) and Broadlink  (60,754) are currently the main players.   

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To foster competitive growth and improve service quality, the government announced the ‘Internet Service Operation Regulations-2019’. This includes setting minimum requirements of Rs40 million nett-worth and up-front capital to be a provider. New business models and qualifications were also introduced.

Companies must also declare five years worth of estimated costs, profit-loss margins, pay-back periods, predicted consumer volume and projection of service coverage. Service fees must also be disclosed, while renewal fees must be paid every five years.

NTA is also proposing a hike in the entry fees that companies need to submit to enter the market. While current fees stand at Rs300,000, the NTA has proposed a new entry fee of Rs2 million, renewed every five years at 90% of the original fee. 

Says NTA spokesperson Minprasad Aryal, “With no minimum requirements for market entry, there were many idle service providers.”

With the new requirements, there is a hope that smaller companies will be able to challenge larger companies on quality rather than by lowering prices.   

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