Financial Institutions in Nepal - Past, Present and the Future

Financial Institutions in Nepal - Past, Present and the Future

Dhananjay K ShrivastavAce Institute of ManagementEMBA, 2nd Semester, Spring 2013

Telecommunications is emerging as vital infrastructure. All economic and social sectors, one way or another, depend on telecommunications for good performance. It is no doubt to say that countries that lack access to modern telecommunications facilities today cannot effectively participate in the global economy. It plays an important role in developing human resources, in providing health services and in the efficiency of government administration as well. Keeping in harmony with the currently evolving new technologies, it is felt that the resources and efforts of the government alone cannot fulfill the gradually Increasing demand of the telecommunication services in a competitive environment. With this concept, using liberalization policy and involving the private sector in a competitive environment for the development and expansion of telecommunication sector in Nepal, The decision of His Majesty's Government of Nepalon December 25, 1995 paved the way forthe involvement of the private sector in the development of the telecommunication services. Spice Nepal Private Ltd. was established in 2004 as the first private mobile operator in Nepal and launched its services under Mero Mobile brand in 2005.Ncell (then Mero Mobile) broke the monopoly held by the state-owned Nepal Telecom, by building a new ground in mobile telephony services. Ncell has adopted the approach that mobile communication is not aluxury but a necessity. Ncell was the first in the market to launch a single ratetariff for all everywhere in Nepal.Ncell was also the first to introduce the Nepalese to a bundled offer (handset + tariff), and the latest smart phone solutions.

Fig1:Subcribers trends for NTC and Ncell.

Fig2:Mobile penetration.Since Ncell is cellular service provider, it utilizes the technology of different forms to provide the world class service to customers. Ncell has become number one telecom company in Nepal beating state owned Nepal Telecom in subscriber base using latest & sophisticated technologies. It has set a benchmark with the competitor for leading in technology.Telecommunication industry is based on technology and the growth of the industry depends upon the wise use of the technologies. The use of technology here doesnt mean that new technologies shall be used when it comes; rather the business model would drive the technology to be adapted by company or end users.As shown in figure there during july,2006 the mobile penetration was very low around 2.92% and the Nepal Telecom was market leader with subscribers of around 0.6milions where as Ncell had 0.1milions subscribers. the situation rapidly changed and mobile penetration has reached to 76.8% and market leader is Ncell now with subscribers around 11Milions where as Nepal telecom has around 9milions subscribers. At this time in the local market, we see the data demand is really very high. People want to always be connected on their finger tips with their friends, family, coworkers and employers. So, data demand is everywhere all the time which is referred to as mobile broadband. In the economic context as well, it is quite important for the citizens should use the technology optimally to reduce the digital gap which can boost up the economy and make the efficient use of the money. Hence competition in data services are still in growing phase and sooner it will invite the next technology called 4G.The functional units in Ncell use different kind of systems/technologies. Each unit responsible for reporting the performance of their activities and responsible key areas in weekly basis. For this, the reports are customized for the management and employee as finance, non-finance, technical, non technical etc. It helps them to analyze and go ahead with some plans if needed. There are plenty of the campaigns that are going each year and campaign management system helps to analyze and report the performance of each campaign. For the campaigns customer detailed data is very important to know their behavior and profiles. It would change the model of campaigns. To do all these, data warehouse is most. I suspect, the competitor have data warehousing in optimal condition since the campaigns they run is simply not adding much innovations. They use flat campaigns for all. Ncell is par excellent with the competitors which add competitive advantage. File Server is one which also adds competitive advantage by storing the data and files properly providing large storage area.The supporting activities that Ncell performs to assist the primary activities to gain the competitive advantage in the local market are classified into procurement, technology management, human resource management and Infrastructure. In the procurement activities, annually millions of dollars are expended for the demands from the multi functional units. It is then transformed into finished product or services. Procurement adds value by the acquisition of appropriate goods or services at the best price, at the right time, and in the desired place with the desired quality and quantity. Technology Management is very important in todays technological driven environment. Technology can be used in production to reduce cost, to develop new products, increase customer service facility, build up cost effective process, etc. It supports the value chain activities such as research and development, process automation, process design, etc. Similarly, Human Resource Management is the key roles of HR are to support the attainment of the overall strategic business plan and the objectives. As a strategic business partner HR designs the work positions by hiring, recognition, reward, appraisal systems, carrier planning, and employee development. They act as an advocate of the employees to motivate them and create a happy working environment. For the organizational changing situation, HR executes the strategic needs of the organization with minimum employee dissatisfaction and resistance to change. Infrastructure includes the planning management, legal framework, financing, accounting, public affairs, quality management, general management, etc. These are required to perform the value added activities efficiently to drive the organization forward to meet the strategic plan and the objectives.

References:

[1]. http://www.nta.gov.np/en/mis-reports-en[2]. http://www.nepalitelecom.com/2012/04/telecommunication-in-nepal-milestones.html

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