1 Telecommunications competition and regulation in Nepal 31 July 2014 Kathmandu, Nepal Simon Molloy, ITU Expert

2 Mission objectives  Undertake study of the current market status of Nepal with respect to the growth of the ICT sector and its impact on economic growth, taking into account the key enabling role of ICT for establishing Nepal as a knowledge society;  Assess the economic and financial health of the Telecommunications sector, taking into account:  sector revenue and growth;  revenue and financial performance of the major licensees;  current and future liabilities of the major licensees; and  significant opportunities and challenges facing the sector;  Based on the above analysis, recommend the viable number of unified license operators in Nepal’s Telecommunications Market;  Based on the recommendation on item 3 above, suggest legal and regulatory approaches to facilitate market consolidation if deemed necessary.

3 “Everyone wants a level playing field but no one can agree on what it looks like”

4 The process so far  Have held discussions with  NTA  SMART Telecom  Nepal Telecom  NCell  Reviewing relevant background documents

5 The context  Nepal is lagging the rest of the world and even some of its regional partners in terms of economic development and growth  Nepal is lagging the rest of the world in telecommunications sector development  Telecommunications is key to improving productivity, competitiveness, development, growth and to improvements in material living standards  Telecommunications is also key to better social outcomes – delivery of government services and education  The need for improved performance is URGENT  Need to address telecommunications for economic development and for social equity and inclusion

6 The barriers  Poor infrastructure  Challenging terrain  Low incomes – I’m less concerned about this – competition in services and technological advance in hardware will soon delivery smart devices at affordable prices  The regulatory environment – I believe is the most significant immediate constraint. Nowhere near world’s best practice. In fact, Nepal should be looking outside the immediate region for regulatory best practice. This is why we are here and the problem should be regarded as urgent.  Attitude and mindsets – greater appreciation of the importance to the Nepalese economy of telecommunications is urgently needed. The cost od delayed development of the sector is not sufficiently well-understood.  The time is right – LTE, spectrum 700 – 900MHz, affordable smart devices (smart phones and tablets)

7 “If the regulatory settings are right you can trust the market to deliver benefits to consumers and the Nation of Nepal”

8 “How many carriers are viable in the Nepalese telecommunications market”

9 “It depends”

10 It depends on: - Regulatory settings - Market growth - Economic growth - Technological development

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