Information Society in Nepal

Internet and telecommunications 1. Role of incumbent telecommunication operator in Internet Prior to mid-1999, NTC had a monopoly on international data connectivity, and ISPs were forced to rely on NTC for their international connections to the Internet. Several ISPs established their own international gateways when the market was liberalized, obtaining higher bandwidth at a cheaper cost. They also provided upstream connectivity for the remaining ISPs. 2. Pricing structure for Internet services The liberalization of the VSAT market and the entry of new ISPs have reduced prices for dial-up Internet access. In January 2000, Nepal had the lowest dial-up Internet tariffs in the South Asia region. Connection charges are, however, relatively high and though usage charges are low compared to neighboring countries, they still remain beyond the reach of the average Nepali (the annual charge for 15 hours of monthly dial-up use is equivalent to 65 per cent of GDP per capita). Users within an ISP's POP area pay the local call charge. The ISPs have proposed abolishing Internet access charges and sharing the telephone call charge with NTC. So far, this has not been acted upon.bntern dial-up 3. Regulatory status of Internet A) Internet Service Provider (ISP) market The ISP market is competitive. Becoming an ISP requires a license from NTA. The term of the license is for five years. ISPs must pay 4 per cent of gross revenue to NTA plus contribute 2 per cent of gross revenue to the Rural Telecommunication Development Fund. They must however apply for a VSAT provider license. ISPs using a VSAT gateway must also apply for a user license. Two ISPs currently provide and use VSAT. Another company, C&C, provides VSAT services to several ISPs. B) IP telephony Nepal's settlement rate for traffic with the US is 84 US cents per minute (as of 6 January 2000), well above FCC benchmarks ITU Focus Group indicative target rates. With BT, the rate is 68 US cents per minute (as of October 1998). However, the international telecommunications arbitrage site, Arbinet (www.arbinet.com), offers as termination rate of just 53 US cents per minute, suggesting there are cheaper ways of terminating traffic in Nepal than via the formal accounting rate mechanism. The high accounting rate certainly creates the incentive for alternative routing. This would seem to explain the recent decline in international incoming traffic from the United States. One possible way to bypass the accounting rate system is via Voice over IP (VoIP). The formal situation is that VoIP is illegal in Nepal as it is seen as impinging upon NTC's international voice service monopoly. While the regulator takes a neutral view on the matter, arguing that IP telephony is almost impossible to block. Ironically, the main usage of VoIP may not be outgoing traffic from Nepal but rather incoming international calls. C) Universal service / access Access to Internet is concentrated in the Kathmandu area, with POPs in less than half a dozen other towns. Given the low level of communication infrastructure, it is clear that the country's primary goal should be to ensure widespread access to communications facilities at affordable rates rather than concentrating on universal service. The universal service goals stated in Telecommunications Policy document are to make available the telephone service as per the demand, to provide new and recent telecommunication services, to make arrangements for making the basic telecommunications services universally accessible to those who do not have separate telephone lines of their own, to make available the basic telephone services in remote and inaccessible rural areas also of the Kingdom. There are actually two components to extending access in rural areas. The first is a commitment by NTC to provide at least two telephone lines in each VDC as part of its 'Special Rural Telecommunications Program.' A second component is the RTDF to which all telecommunication licenses (including ISPs) must contribute 2 per cent of their annual revenue. please contact for more Info Lacche Bahadur President Information Society Forum of Nepal (ISFN) P.O.Box: 13249 Phone : 977-1-433619/ 977-1-413609 Dillibazar, Kathmandu, Nepal E-Mail : sur@lbk.mos.com.np

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