Subsidies in Eastern Telecommunication in Nepal Bhoop Raj Pandey Consultant

Teledensities n Total in telephone line in connection (July,2004) n Waiters (July,2004) n Nepal-1.67 n Urban n Rural -0.18

Policies n “….. make availability the telephone service as per demand ………….” n “…..make available the basic telephone services in remote and inaccessible remote areas……”

Continue… n “…..develop the telecommunication as a main pre-requisite of national development with the maintaining the regional balance…..” n “…..involve the private sector as well in the development and operation of telecommunication services……”

Continue... n “…..the basic telephone services provider shall have to expend 15 percent of total investment for the purpose of development and expansion of Telecommunication services in the rural areas…..”

Development Regions

Eastern Development Region n Number of VDCs 893 n Total population 4.5 million n No.of VDCs without Tele. 534

Subsidies and incentives n Payment of the RTS Subsidy n Reduction of license fee (Rs 100,000) for the initial license period of ten years n Exemption for payment of Rural Telecommunication Development Fund contribution for the initial five years

Continue… n Exemption from payment of spectrum use to the extent that incumbent operator is similarly exempted from payment of frequency fees for rural services. n The license renewal fee is to be negotiated and shall not exceed 4 percent of gross annual revenue.

Continue... n Additional services under the same license to be provided. n As many additional telephone services. n Any of the following services –Internet access and information services – –Voice mail –Fax

Continue… –Audio conferencing –Prepaid calling card services –Data communication n STD and ISD services

Conclusion n process faster rollout and complete the project before the stipulated time. n has created different situation for other operators including incumbent. n Operators including incumbent has started extending their area in rural areas.

Continue... n Reduction in tariff has already started and announced further reduction in long distance tariff. n Forceful implementation of policy and effective regulation is key to success. n Government occasionally lacks determination behind forceful implementation

Continue... n peace in the country is essential to attract the investors.

Thank you.