Nepal Telecom is making efforts to reduce data costs by around 15-20%. The plan though is not heard for the first time but the latest statement does reflect that the telco is working on it.

How much is cheap or affordable to you for your mobile data or WiFi internet charges? While the parameters could be subjective for each, Nepal still comes among the countries where people are paying high for the internet. Despite getting speedier packs at ‘affordable’ cost from leading companies, Nepali internet users have long complained that they are still paying high.

And the consumers’ demand for the reduction of internet costs has not been taken for granted or so it seems. The country’s largest telecom operator Nepal Telecom (NTC) has been making efforts to drive down the data costs as per the company’s Deputy Managing Director and Chief Commercial Officer Sangita Pahadi.

Speaking at an interactive program on the ‘barriers of data/internet tariffs reduction in Nepal’, she confirmed that the telco is doing its homework to lower data prices by 15 -20%.

And she also pointed out the lowering prices of data over the years. She argued that Ntc has lowered its data costs by 75% in two years.

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Barriers to reducing internet costs – Taxes, cost of bandwidth

She explained that reducing data tariffs face hazards. “Our bandwidth costs are high, and that makes the internet costly compared to others. Ntc spends 25% of its revenues to renewal charges annually.”

Pahadi demanded that telecom authority NTA decrease its frequency charges which would help service providers reduce their internet costs.

In her speech, the Deputy Managing Director said Ntc could lower its internet price as low as 15 – 20%. She said infrastructure sharing will soften its maintenance costs and help contain data prices.

Ncell’s Chief Legal and Corporate Service Offer Ramesh Ghimire shared a similar argument. He called the government’s stance on telecom companies contradictory. “The government has categorized telecom in the list of “Essential Services” but imposes extremely high taxes”, he complained.

“The government has slapped a 30% income tax on telecom companies treating it as banks and cigarettes/tobacco industries. instead of offering subsidies, the government is hurting the companies with its unreasonable tax provision”, he added.

Ghimire later illustrated how telecom companies pay up to 50% of their incomes under various tax labels. He demanded that the total tax threshold be as low as 20%.

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About NTA’s Efforts

It is obvious that the bandwidth Nepali companies buy come at a high cost and it translates to higher costs for the consumers. Nepali companies’ buying bandwidth at diverging and small scale has also contributed to the high internet costs in Nepal.

Speaking on this, NTA Chief Purushottam Khanal hinted at barring companies from importing bandwidth at a small scale. He said, buying internet bandwidth at a small scale has led to high and inconsistent costs. And buying in bulk would alleviate costs issues to some extent.

Nepali telecom companies buy their bandwidth largely from Indian companies such as Artel, and Tata. The deal with China was believed to end the reliance on Indian upstream providers. But it has not been able to so far. But NTA has proposed to establish Nepal’s direct link to the undersea fiber cables. If that succeeds, it would facilitate Nepali telecom providers to lower the data fare but the government tax seems to be the first and foremost hurdle.

How much will you be willing to pay for your data/internet bills and should the government be the one to take the lead to reduce the internet costs in Nepal? You can share your inputs in the comments below.