Beyond Speed: Can 5G Deliver Sustainable Returns for Nepal?- Ashma Rajopadhyaya

Last Updated on November 6, 2026

Nepal stands at an interesting point in its telecommunications journey. While the country is preparing for the next generation of mobile technology, the financial position of the telecom sector raises an uncomfortable question: if existing networks are already struggling to generate adequate returns, why should operators invest billions in another generation of technology?

The telecommunications sector in Nepal faces a structural paradox. While subscriber demand for data continues to surge, operators are confronting declining Average Revenue Per User (ARPU) and shrinking net margins. The sector has witnessed a continuous decline in its revenue. Once a NPR 100 billion market has now come down to below NPR 70 billion, impacting operators in their net profit margin. Concurrently, deploying nationwide 5G infrastructure demands capital expenditure exceeding US$ 260 million, with operators like Ncell estimating necessary capital investments between US$ 200 million and US$ 250 million. Source: 5G in Nepal

The central tension for Nepal lies in striking the right balance between investment and regulatory preparedness. If operators invest too early in an environment characterized by overly prescriptive or “utopian” regulation, limited monetizable use cases, and uncertain returns, weak ROI may become an unavoidable reality—a difficult truth that all stakeholders must acknowledge. Conversely, if telecom operators remain passive in the face of technological advancement and delay investment, Nepal risks falling behind technologically and facing a significant competitive disadvantage.

Hence, the debate around 5G in Nepal should move beyond questions of speed, coverage and the number of compatible devices. The more important question is whether 5G can generate sufficient commercial, economic and social value to justify the investment required.

Nepal’s 5G strategy should consequently be use-case driven rather than technology driven. The objective should not simply be to deploy another generation of mobile networks, but to determine where 5G can address Nepal’s specific developmental challenges and create measurable economic value.

1. Why Does Nepal Need 5G?

The most obvious question is: if 4G already provides mobile broadband connectivity, why does Nepal need 5G?

The answer lies not only in faster consumer internet, but in the broader capabilities of 5G. Internationally, 5G is associated with three broad capabilities: enhanced Mobile Broadband (eMBB), massive Machine-Type Communications (mMTC), and Ultra-Reliable Low-Latency Communications (URLLC).

eMBB can provide very high-speed broadband, which may be relevant to urban connectivity, tourism and education. mMTC enables the connection of a massive number of devices, creating opportunities in agriculture, utilities and smart cities. URLLC enables highly reliable and low-latency communications that may support applications in healthcare, transportation and industrial environments.

The International Telecommunication Union (ITU) has identified applications of IMT/5G across sectors including healthcare, utilities, manufacturing, agriculture, education and logistics.

For Nepal, therefore, the 5G debate should not begin with “How fast is 5G?” It should begin with a more fundamental question:

“Which Nepali problems justify 5G?”

This shift in perspective is important because the value of 5G may not necessarily come from consumers simply moving from 4G to faster smartphones. Its greater economic potential could come from connecting machines, institutions, government institutions, public infrastructure and businesses.

2. From Consumer Connectivity to Sectoral Transformation

The most significant opportunity for Nepal may lie in moving beyond traditional consumer connectivity and developing sector-specific applications.

Rather than attempting to replicate every international 5G use case, Nepal should identify sectors in which 5G can provide meaningful additional value.

2.1 Smart Agriculture

Agriculture remains an important part of Nepal’s economy, yet productivity is affected by fragmented farming practices, limited access to timely information and dependence on traditional methods.

5G-enabled IoT networks could support soil monitoring, smart irrigation, weather monitoring, livestock tracking, precision agriculture and drone-based agricultural monitoring.

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However, the economic value of 5G in agriculture would not necessarily come from farmers using 5G smartphones. Its value could instead arise from connecting large numbers of sensors and devices that generate real-time information.

This raises an important policy question: who will pay for these services?

If farmers cannot individually afford connected devices and associated services, government agencies, cooperatives, agricultural institutions or private agribusinesses may need to become the primary customers. Consequently, the business model is as important as the technology itself.

2.2 Healthcare and Telemedicine

Healthcare represents another potentially significant application.

Nepal’s geographical challenges mean that specialist healthcare services are concentrated in urban centres, while people in remote districts may face significant difficulties accessing specialist care.

A future 5G-enabled healthcare ecosystem could connect a specialist in Kathmandu with a regional hospital and a patient in a remote district. Applications could include remote consultations, connected medical devices, remote monitoring, medical imaging, and emergency communications. While telemedicine services in Nepal remain limited in scale, initiatives such as the one supported by Ncell at Dhulikhel Hospital have already delivered meaningful results over the years, allowing people in remote areas to access quality healthcare from where they live. 5G-enabled services are expected to further amplify this impact.

However, technology alone cannot resolve the country’s healthcare challenges. Advanced 5G healthcare applications would also require adequate hospitals, skilled medical professionals, reliable electricity, fibre backhaul and supporting cloud or edge infrastructure.

The lesson is important: 5G should complement existing infrastructure and institutions rather than be treated as a substitute for them.

2.3 Smart Cities and Intelligent Transportation

Kathmandu Valley provides a useful hypothetical environment for examining the potential of 5G-enabled smart cities.

Applications could include intelligent traffic signals, connected vehicles, public transport management, smart parking, environmental sensors, video analytics and emergency response systems.

The potential value chain could be represented simply as: 5G → sensors → real-time data → analytics/AI → better traffic management → reduced congestion. However, the implementation of such systems would require coordination among telecom operators, municipalities, transport authorities and technology providers. It would also require clear rules concerning data management, privacy, cybersecurity and public procurement.

2.4 Tourism and the Connected Everest Region

Tourism offers a particularly Nepal-specific opportunity.

Future 5G-enabled tourism applications could include augmented and virtual reality experiences, real-time translation, connected trekking infrastructure, emergency communications, smart airports, environmental monitoring and location-based services.

One possible future scenario could be a “5G-enabled Everest Region”, where connected rescue equipment, weather sensors, tourist tracking systems and drone-assisted search and rescue support both tourism and safety.

Yet this example also demonstrates the complexity of deploying 5G in Nepal. Mountainous geography, limited electricity infrastructure, backhaul requirements and the cost of maintaining sites in remote locations could significantly affect the business case.

Thus, the objective should not be to deploy 5G everywhere simply because the technology exists. Deployment should correspond to areas where the expected economic and social benefits justify the cost.

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2.5 Industrial IoT and Manufacturing

The industrial sector provides another opportunity to move the 5G discussion beyond smartphones.

Potential applications include smart factories, automated machinery, predictive maintenance, robotics, warehouse management and real-time monitoring. Private or non-public 5G networks may also become relevant to specific enterprises.

But Nepal must confront a fundamental question: Is Nepal’s manufacturing sector sufficiently digitized to create meaningful demand for private 5G networks?

If the answer is currently limited, policy should focus not merely on deploying networks but also on encouraging industrial digitalization and developing the ecosystem of enterprises capable of using them.

3. The Business Case: Who Will Pay for 5G?

Potential customers could include consumers, government agencies, municipalities, hospitals, industries, agricultural businesses, tourism companies and logistics providers.

The traditional consumer model relies heavily on subscribers purchasing mobile services. But if telecom operators are already experiencing revenue pressure, relying exclusively on consumers to generate sufficient incremental revenue from 5G may not provide a strong investment case.

The alternative is to develop an enterprise and government market. In this model, operators could provide specialized connectivity and integrated solutions to institutions and businesses. Revenue would therefore come not simply from data consumption but from higher-value services.

The future commercial equation could become: Enterprise/Government demand → specialized 5G services → operator revenue → infrastructure investment → expanded digital services

This could potentially provide a more sustainable basis for investment than relying solely on premium consumer tariffs.

4. Government as an Anchor Customer

This is where the Government of Nepal can play a particularly important role.

The government’s role should not necessarily be to provide direct financial support to telecom operators. Instead, it can become an anchor customer by creating demand for 5G-enabled public services.

For example, government and municipalities could procure 5G-enabled systems for intelligent traffic management, smart parking, public transport tracking, environmental monitoring and emergency response.

Similarly, public healthcare institutions could procure connected healthcare solutions, telemedicine services and remote diagnostic systems. Agricultural institutions could use connected sensors for irrigation, soil monitoring and weather information.

The resulting economic cycle could be: Government procurement → operator revenue → infrastructure investment → improved public services

This approach differs significantly from a blanket subsidy. Rather than simply transferring public resources to operators, government procurement creates demand while simultaneously improving public services.

5. Government’s ROI Should Go Beyond Telecom Tax Revenue

The Government’s return on 5G investment should also be considered more broadly.

If regulatory incentives are provided to facilitate 5G investment, the government should not evaluate the decision solely by asking:

“How much additional tax will be collected from telecom operators?”

Instead, it should ask: “What economic value can 5G generate across the wider economy?”

The direct government return may include VAT, corporate income tax, telecom-related fees, royalties, spectrum fees, customs-related revenue and employment-related taxes.

The indirect return could be considerably broader.

If 5G contributes to productivity improvements in agriculture, manufacturing, tourism, logistics, healthcare and education, the resulting increase in economic activity could expand the overall tax base.

This is effectively a multiplier argument.

The government should therefore consider the economic value generated across the ecosystem rather than treating telecom taxation as the only measure of return.

6. Capital Expenditure, Investment and the Question of ROI

The challenge remains that 5G requires substantial investment.

Recent estimates referenced in the source material suggest that nationwide 5G expansion could require more than US$ 260 million, while Ncell has indicated an intention to invest approximately US$200–250 million in 5G trials and broader telecommunications infrastructure.

For investors and operators, the relevant question is ultimately whether expected future cash flows justify the initial capital expenditure.

Government policy can influence this equation without directly assuming the entire investment burden.

One potential approach is CAPEX-linked tax incentives. Instead of a blanket tax holiday, investment in qualifying 5G infrastructure could be supported through mechanisms such as accelerated depreciation or investment allowances.

The objective would be to improve the speed at which investors recover their capital, thereby improving: Cash flow → NPV → IRR → investment attractiveness

Such mechanisms could align government policy with private-sector investment incentives while ensuring that fiscal support is connected to actual infrastructure investment.

7. Nepal’s Legal and Regulatory Readiness

Technology investment cannot be separated from regulatory certainty.

Nepal’s legal and regulatory framework should therefore be examined to determine whether it adequately accommodates emerging 5G applications and business models.

The Telecommunication Act, 2053 and related regulatory instruments should be assessed in relation to areas including 5G, IoT, private or non-public networks, network slicing, infrastructure sharing, flexible spectrum management and enterprise connectivity.

The objective should not necessarily be to create technology-specific legislation for every new development. A more sustainable approach may be to establish a technology-neutral and future-ready framework that provides sufficient flexibility for technological evolution.

The Nepal Telecommunications Authority will have an important role in areas such as spectrum management, licensing, technology neutrality, QoS, infrastructure sharing, cybersecurity, type approval, consumer protection and rollout obligations.

The NTA’s Master Action Plan for Implementation and Promotion of 5G in Vertical Sectors is particularly relevant because it provides a Nepal-specific basis for considering how 5G may be applied beyond traditional mobile broadband.

The Digital Nepal Framework should similarly provide a broader policy context for connecting 5G deployment with Nepal’s digital transformation objectives.

8. Regulation Should Enable Investment, Not Create Unnecessary Uncertainty

A major challenge for policymakers is maintaining an appropriate balance between regulation and innovation. Telecommunications regulation must protect consumers, competition, security and public interest. At the same time, excessive rigidity can discourage investment, particularly where technological development is faster than the legislative process.

Nepal should therefore consider a more responsive and technology-neutral regulatory approach.

This could include controlled trials, innovation sandboxes, expert technical mechanisms and faster regulatory responses to emerging technologies.

The objective should not be to create a regulatory environment in which every technological development must first be accommodated through lengthy legislative reform. Instead, the framework should be sufficiently progressive and responsive to allow innovation while maintaining appropriate safeguards.

As the source material argues, regulatory reform should be progressive and practical rather than “utopian” where technology cannot realistically be controlled through prescriptive regulation alone.

9. Infrastructure, Spectrum and Affordability

Even a commercially attractive use case cannot succeed without supporting infrastructure.

Nepal’s 5G deployment will need to address fibre backhaul, reliable electricity, towers and sites, small-cell deployment, rural coverage and the country’s challenging mountainous geography.

Spectrum policy will also be critical. Availability, pricing, refarming, allocation strategy and technology neutrality can significantly influence the economics of network deployment. ✅5G Spectrum Auction in Nepal

Affordability presents another challenge.

The effective adoption of 5G depends on more than network availability:

5G handset + 5G tariff + digital literacy + network availability

If 5G services are affordable only to a small high-income segment, the technology could potentially deepen rather than reduce Nepal’s digital divide.

Consequently, policymakers should distinguish between 5G deployment and meaningful 5G access.

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10. Infrastructure Sharing and Rural Connectivity

Given the scale of investment required, infrastructure sharing deserves greater attention.

Mandatory or strengthened infrastructure-sharing arrangements, where appropriate, could reduce unnecessary duplication of infrastructure and lower deployment costs.

Similarly, the Rural Telecommunications Development Fund (RTDF) could be strategically utilized to support connectivity in areas where commercial returns alone may not justify deployment.

This is particularly relevant to Nepal’s rural and mountainous regions, where the cost of infrastructure may be significantly higher than the expected immediate commercial return.

The policy objective should therefore be to create a framework where commercial investment and targeted public support complement rather than substitute one another.

11. FDI and Investment Confidence

The transition to 5G will also require substantial capital.

Nepal should therefore maintain an investment environment that does not unnecessarily discourage foreign investment because of concerns surrounding profit repatriation. Such concerns should be balanced against the need to attract capital, technology, expertise and long-term infrastructure investment.

The relevant policy question should be:

Does Nepal’s regulatory environment provide investors with sufficient predictability to justify long-term telecommunications infrastructure investment?

For an infrastructure-intensive sector, regulatory certainty can itself be an important component of the investment equation.

12. Is 5G Sustainable?

The success of 5G should ultimately be assessed against broader sustainable-development objectives.

Potential applications can contribute to several Sustainable Development Goal (SDG), a global objective adopted by the United Nations. These include:

• SDG 2 – Zero Hunger: smart agriculture
• SDG 3 – Good Health and Well-being: telemedicine
• SDG 4 – Quality Education: connected and immersive learning
• SDG 8 – Decent Work and Economic Growth: digital economy
• SDG 9 – Industry, Innovation and Infrastructure: digital infrastructure
• SDG 11 – Sustainable Cities: intelligent urban systems
• SDG 13 – Climate Action: environmental monitoring

Yet 5G should not automatically be labelled sustainable.

Its deployment may also involve higher energy consumption, additional infrastructure requirements, electronic waste and significant capital expenditure.

Therefore, the sustainability question should be:

Does the economic, social and environmental value generated by 5G outweigh the resources required to deploy and operate it?

That is a more meaningful measure of sustainable technological development.

13. What Should Nepal Do?

Nepal’s policy response should focus on creating an ecosystem in which investment and public interest reinforce one another.

First, develop a use-case-oriented national 5G strategy.

5G policy should be linked with specific national priorities rather than focusing solely on network deployment.

Second, adopt a predictable and technology-neutral spectrum policy.

Spectrum allocation should be transparent, non-discriminatory and sufficiently flexible to support technological evolution.

Third, facilitate infrastructure sharing.

Reducing unnecessary duplication of infrastructure can improve the economics of network deployment.

Fourth, consider CAPEX-linked investment incentives.

Accelerated depreciation or investment allowances for qualifying infrastructure could improve investment attractiveness without necessarily providing blanket tax concessions.

Fifth, strategically utilize RTDF for rural connectivity.

Public resources should be directed toward areas where social value is high but commercial returns may be insufficient.

Sixth, encourage government and enterprise demand.

The government can become an anchor customer for 5G-enabled public services, while operators should increasingly explore enterprise and vertical-sector solutions.

Seventh, create a responsive regulatory mechanism.

Nepal needs regulatory institutions capable of responding to technological developments in a timely manner, supported by appropriate technical and industry expertise.

Finally, treat the telecommunications sector as an integrated ecosystem.

Taxation, spectrum, licensing, infrastructure, cybersecurity, consumer protection, foreign investment and digital policy should not be developed in isolation. They collectively determine whether the sector remains capable of attracting investment and delivering national economic value.

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Conclusion

Nepal’s 5G debate should not be reduced to a question of network speed or technological modernity. The real question is whether Nepal can transform 5G from a connectivity investment into an economic infrastructure platform.

For telecom operators, the challenge is to identify commercially sustainable applications beyond traditional consumer mobile broadband. For the Government, the challenge is to create the regulatory and economic conditions under which private investment can generate reasonable long-term returns while producing wider public value.

The Government can support this transition not merely through subsidies, but through predictable regulation, technology-neutral spectrum policy, infrastructure sharing, targeted fiscal incentives, strategic use of RTDF, public procurement and policies that encourage enterprise adoption.

Most importantly, Nepal must recognize that the Government’s return from 5G cannot be
measured solely through the taxes and fees collected from telecom operators. The greater return may come from the productivity, innovation, employment, public-service improvements and economic activity enabled across the wider economy.

The success of 5G in Nepal should therefore not be measured solely by the number of 5G sites, subscribers or speed tests. It should be measured by whether 5G enables measurable improvements in productivity, public services, economic activity, inclusion and sustainable development.

For Nepal, the question is no longer simply whether 5G can be deployed. The more important question is whether the country can build the regulatory, economic and institutional ecosystem necessary to make 5G investment commercially viable and nationally valuable.

(Rajopadhyaya works in Ncell as a Specialist)