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If you count all of the telecom operators in Nepal, there are altogether six such operators (telcos) providing one or other telecommunication services. Not all of those telcos have nationwide coverage. Whereas all of them have the plan to expand coverage all over the country with a unified license. But how many are really needed for a small country like Nepal, we will talk about the number of telcos required for Nepal in this post.
Three of the telcos namely Ntc, Ncell and Smart cell are expanding their reach to more areas and people in the country. Ntc, a government-owned telco have made their services available in more of the rural areas. Now Ncell, the private telco have also extended their reach to many remote areas, which is little less than Nepal Telecom. Smart Cell has not been able to increase the expansion pace other than a few cities. So, there seems to be the gap in providing mobile coverage in more areas. For which, some people point to the need for another telecom operator. Read in details about all of the telecom companies in Nepal.
Operators like Smart Telecom, CG tel, Nepal Satellite have first got the limited GSM license for some remote areas. Then NTA invited them for a unified license if they were willing to have nationwide service expansion. UTL, the CDMA operator may as well come up with their plan to operate a nationwide GSM network. Read here for more.
Suppose all of them want to invest heavily and expand their network to all places of Nepal, will they be able to get enough return out of it. Can they sustain with such fierce competition? It is highly doubtful for them to achieve their target.
So, in our opinion, a maximum of three nationwide operators are enough for Nepal. In terms of competition, market growth and subscribers, only three telcos (telecom service providers) can sustain the telecom market in Nepal. Even if six operators want to invest for the nationwide coverage, they can do so by merging with one or two other telcos.
The merging and Acquisition guideline has not been put into effect, to promote acquisition and merger among domestic telecom companies. As known, it also has a provision for not allowing any telco to have more than 40 percent market share. So, they will not allow NTC and Ncell to merge or acquire any other telcos. But other telcos like Smart Telecom, Nepal Satellite, UTL and CG tel (STM telecom) can merge and acquire one another. It is also very unlikely that all four merge into one, resulting in four nationwide telcos in the best case.
Minister for Communication and Information technology (MOCIT) Mr. Gokul Baskota has recently expressed his views to reduce the no of telecom operators in Nepal. He opined that six no of telecom operators are already high in number for a country like Nepal. Speaking in Federal parliament’s Development and technology committee, Minister Baskota expressed that even in developed countries there are around 3 telecom operators. So, he questioned the need for more than 3 telcos in Nepal.
Merging and Acquisition is the only way that can reduce the no of telecom operators in Nepal. But the telcos merger and acquisition policy has been on hold from sometime. It seems like they will put the Merging and Acquisition Policy into effect soon.
Please comment on your views for the number of telcos needed for Nepal?