Nepal Telecommunications Authority (NTA) is mulling 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.
At a recent event in Kathmandu, NTA chairman Bhupendra Bhandari argued, “Merger has become very important for ISPs.” But he stated that acquisition and merger may not be necessary for telecom companies.
To allow mergers, the telecom governing body is working on the ISP Mergers and Acquisition (M&A) policy.
The idea of ISP merger has floated in Nepal in recent years. However, it hasn’t solidified. But the authority seems more serious in its need than ever.
Especially, as the number of ISPs continue to grow, managing the industry become more important. Currently, there are 107 licensed ISPs in Nepal. However, only a few are making positive financial growth while small timers are struggling to even exist. This has led to an unhealthy and unsuitable internet market potentially compromising the competency of the internet service.
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ISP mergers for the good of the market
Nepal has a total of 107 licensed internet service providers. 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. The riveting speed war is reserved only for a few major ISPs.
And even among the major ones, WorldLink leads atop with over 10 lakh customers . Nepal Telecom and Dish Home boast over 3 lakh customers while other top ones have over 2 lakh customers on average. Don’t miss: How to check internet speed on your PC or mobile?
The internet industry has reached Rs 26 billion but while this seems encouraging, it’s only been about them on the top. Bhandari said, “It’s difficult to pressure telecom companies to adopt new technologies when their revenue is decreasing. Currently, due to the development of industrial technology, revenues from the telco industry is decreasing, but the that of internet industry is increasing.”
He also suggested that companies need to see things differently. “Why don’t telecom companies see their earning as being diluted (diverted) rather than decreasing?’ For e.g., he said “Ncell has not done the fiber internet (FTTH) business till date. Even though the income of telecom companies is decreasing and the internet has increased to over Rs 25 billion, Ncell does not seem to be paying attention to such a market.’
On the other hand, Nepal Telecom has its fiber internet service under the brand name NT Fiber. But speaking of the same topic, Ncell is eying an ISP venture too. Earlier, there were rumors that Ncell would acquire Classic Tech. Though this hasn’t happened.
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.
