Telecom authority NTA has revealed it will pave the path for (Internet Service Providers) ISP mergers. The plan is to contain the spiraling number of service providers in Nepal and facilitate healthier competition among the companies.
To allow mergers, the telecom governing body is working on the ISP Mergers and Acquisition (M&A) policy.
Although a small market, Nepal has almost 140 licensed ISPs operating across the country. The issue is many of the companies are not able to break 20 thousand customers. This has led to an unhealthy and unsuitable internet market potentially compromising the competency of the internet service.
Regarding the increasing number of service providers, NTA chairman Purushottam Khanal admits that Nepal has an excessive number of companies. He said, “Legally, there is no provision to refute a license to a willing company. But we need to limit the number of service providers for a healthier market and pave the path for a merger among them.”
He said that the regulator is working on the Merger and Acquisition policy at the moment.
The chairman also revealed that NTA has included this policy in its yearly plans for the next Fiscal Year 079/80.
The regulator has sanctioned a budget of NPR 1.7 billion for next FY’s plans and policies.
There is a provision to seek resources from NTA to get approval for its budget. The provision came in place since former Finance Minister Bishnu Poudel made the policy in FY 078/79 budget speech.
Nepal has a total of 138 licensed ISPs. As per the NTA data, there are 53 registered companies providing internet service. But what’s grim is that most of the companies are not potentially breaking into the profitable and competitive state. Unflatteringly, many ISPs in Nepal have below 20 thousand customers. And that is after combining all the fixed-line services not just including the fiber broadband service.
Zishan Network, a new internet venture has started with just 41 customers. Meanwhile, 10 ISPs have below 1 thousand subscribers. This paints a gloomy picture of the internet service market in Nepal. The riveting speed war is reserved only for a few major ISPs.
This unhealthy competition does call for a merger. This would help struggling companies devise better strategies and grow their base. Otherwise, most service providers hoping for expansion and profit are likely to doom.
An ISPs merger provision would help limit the quantity and bring a qualitative difference for the good of the end customers.
What do you think of NTA’s plan for ISP’s merger in Nepal? Do you think it is imperative for the better? You can share your input in the comments below.