Country Paper on Telecommunication/ ICT development in Nepal

Presented at Capacity Building Workshop on Information Society Statistics: Infrastructure and Household Indicators

Dr. Subarna Shakya Executive Director

National Information Technology Center Ministry of Environment, Science and Technology

sshakya@nitc.gov.np

Country Profile in General Nepal remains one of the poorest countries in Asia with 31% of the population still living under the poverty line.

• Area : 140,800 sq km • Geography : landlocked • Population: 25.2 million • Poverty (No. of people living below $1 a day): 7.75 million (31%) • Gross Domestic Product (GDP) per capita: $260 • Life expectancy: 60.2 years • Literacy rates: 56% (of population age 15+), 70.5% (of net primary enrolment) • Malnutrition: 48% (of children under five) • Population growth rate: 2.17% • Electricity – production : 2.565 billion kWh • Exports – commodities: carpets, clothing, leather goods, jute goods, grain,

software’s • Exports - partners: India 47.4%, US 22.7%, Germany 8.4% • Currency (code): Nepalese rupee (NPR)

Although there has been some progress on the MDGs, a great deal remains to be done. The deep rooted nature of social exclusion in Nepal makes it harder to achieve the MDGs. Well championed strategies to supplement national political commitment will be needed to tackle this. Nepal is on track to meet four of the MDGs – Poverty and Hunger, Gender Equality, Child Mortality and Diseases (Tuberculosis). Focused efforts from the government and donors have increased the number of girls in primary education.

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ICT Sector Overview

The history of telecommunications in Nepal is relatively newer compared to the developed countries. A line between Kathmandu and the Indian border was opened in 1914, but it took almost four decades when the capacity of the local exchange in Kathmandu reached 300 lines. Major growth in telecom sector in Nepal has occurred since 1995. World Bank assistance in particular has spurred the initial growth of telecom sector in Nepal resulting in steady increase telephone density. In the latter half of the 1990s, Nepal has grown as fast, if not faster, than any other country in the South Asia region – despite the absence of foreign investment. An important milestone was reached in 1999 when tele-density reached one line per 100 inhabitants. The Telecommunication Act of 1997 established a regulatory body, the Nepal Telecommunications Authority (NTA) on March 4, 1998. Government of Nepal has passed the Telecom Policy, 2004 replacing the older Telecom Policy, 1999 The erstwhile The Nepal Telecommunications Corporation (NTC) as the incumbent public telecommunications operator held a monopoly over all aspects of telecommunications in Nepal until few years back. Until recently, NTC used to be fully State-owned entity, which has now been privatized and converted into Nepal Telecom. The Nepal Telecom (formerly Nepal Telecommunications Corporation), Nepal’s pioneer telecommunications operator, has made significant progress in the growth and development of the national public switched telecommunications network (PSTN) in the last decade, particularly during Nepal’s Fifth Phase Telecom Project (1992-97). NTC also started providing GSM mobile service from May 1999. At present United Telecom Ltd. (UTL) is providing Wireless Local Loop based telecom service inside Kathmandu Valley. Similarly, Spice Nepal (P) Ltd. is preparing to provide cellular mobile telephone connections based on GSM from Mid September 2005. The Internet was first introduced into Nepal in 1993 in a venture of the erstwhile Royal Nepal Academy of Science and Technology (RONAST), now Nepal Academy of Science and Technology and a private company, Mercantile Office Systems (MOS). In 1995, a second company, World Link, set up a similar service at a lower price through a cheaper connection to Canada. Their only business was providing e-mail service, whereas MOS's e-mail service was only one of many aspects of its business. It is estimated that total computers including both branded and assembled in use is around 155300 out of which the computers in various organizations is estimated to be 53381 and rest in the disposal of various individuals and households. Out of the total computer, the percentage share of Pentium- III is 44 %, Pentium-IV 37%, Pentium-II 11 % and other computer less than 1 %.

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Telecom Network of the Country:

The Nepal Telecom, Nepal’s incumbent telecommunications operator, has made significant progress in the growth and development of the national public switched telecommunications network (PSTN) in the last decade, particularly during Nepal’s Fifth Phase Telecom Project (1992-97). With the introduction of new Telecom Operators, the same tempo of growth continues in the ongoing Seventh Phase, with the number of distributed lines increasing from approximately 65,000 in 1992 to over 7,64,363 Post-paid Mobile Subscribers 1,21,977 and Pre-paid Mobile Subscribers 14,49,044 till 16 July, 2007. The fully digital network offers full national and international direct dialing services. The national trunk network is equipped with 9202 Mbps, out of which 8434 Mbps link is being used to link Kathmandu with the rest of the country whereas 768 Mbps link is used within Kathmandu Valley. Nepal Doorsanchar Company Limited, the only wireline operator in Nepal has 231 Telephone exchanges in operation at 221 different locations in 72 districts of Nepal. There are a total of 3423 International telephone circuits in operation including Microwave circuits. Total capacity of E1 links installed is 4,601 out of which 3,994 are equipped, 2,273 are currently used and 1,721 is spare. Telecom Statistics at a glance:

Service Subscribers Fixed line telephone 5,13,352 Mobile Telephone 15,71,021 Post-paid mobile 1,21,977 Pre-paid mobile 14,49,044 Wireless in Local Loop 2,51,011

Internet (with E-mail) 62,586 VSAT user 110

Service Penetration (1 in 100 populations):

Service Penetration Rate (in %) Fixed + Mobile 8.84 Fixed Telephone 2.89 Mobile Service 5.95 Internet (subscribers only) 0.24

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Institutional Arrangement Ministry of Environment, Science and Technology and Ministry of Information and Communication are the ministry responsible for ICT Development. National Information Technology Center of Ministry of Environment, Science and Technology is ICT Implementation body in Nepal where as Nepal Telecommunication Authority under Ministry of Information and Communication is Telecom regulatory body. National Information Technology Center (NITC) was established in the year 2002 in line with IT Policy 2000 under the Ministry of Environment, Science and Technology (MOEST). NITC has the main objective to build knowledge based society by supporting knowledge based institutions and industries as well as promote and develop Information Technology (IT) by making it accessible to the general public. Executive Director of NITC has the primary responsibility to implement or get implemented the policy and the plan on information science and information technology, monitor and supervise the same and regulate the activities carried out by the private sector and submit reports on these activities to the Ministry of Environment, Science and Technology(MoEST). NITC has the following main functions:

• To implement information communication technology related plans and policies. • To assist Nepal Government in all forms of computer related tasks.

• To design and launch websites for all Government organizations, and assist in

timely manner in maintaining and operating of the same

• To administer the development of required coding and standards to engender uniformity in information technology, abide by the same and put it into operation.

• To assist in research and development of information communication technology

in the country.

• To pass all policies, annual and periodic plans, programs, and budgets for the committee and manage the required funds for the implementation of the same.

• To do other provisional work for the development of information communication

technology as required by Nepal Government.

• For the development of information communication technology at a national level, collecting all types of statistics and also work as data depository and information bank.

• To help Nepal Government organizations in improvement of computer data

keeping and development and expansion of the same

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Under Ministry of Information and Communication, Nepal Telecommunications Authority (NTA) has been established on March 4, 1998 as an autonomous regulatory body. Following are the function and duties of Authority:

• To provide suggestions to Government of Nepal on the policy, plan and program to be adopted by Government of Nepal for the development of the Telecommunications Service.

• To make the Telecommunications Service reliable and easily available to the public.

• To make necessary arrangement to avail basic Telecommunications Service and facilities in all rural and urban areas throughout Nepal.

• To involve the national and foreign private sector investors in the operation of the Telecommunications Service.

• To make arrangement for the coordination and healthy competition among the persons providing Telecommunications Service and facilities, so as to provide such service and facilities to all public in general.

• To prescribe, fix and approve the standard and quality standard of the plant and equipment relating to the Telecommunications and the Telecommunications Service.

• To regularize and systematize Telecommunications Service • To grant License to operate the Telecommunications service. • To approve and regularize the fees to be collected by a person having obtained

License for providing the Telecommunications Service. • To perform the functions relating to the frequency in accordance with the policy

determined by the Radio Frequency Policy Determination Committee. • To carry out or cause to carry out the research about the development and use of

new technology in the field of Telecommunications. • To cause to develop the skilled manpower for the Telecommunications Sector. • To develop and extend or cause to develop and extended the Telecommunications

Service in such a way that it protects the rights and interests of the consumers. • To develop or cause to develops Nepal as an International Transit for

Telecommunications. • To carry out necessary and appropriate functions for the development and

promotion of the Telecommunications Service.

ICT Data are basically collected from the information given by different service provider. Nepal Telecommunication Authority analyzes those secondary data provided by the respective services provider and publishes the MIS report quarterly. Beside this other government agencies like National Information Technology Center (NITC) and High Level Commission for Information Technology sometimes publish ICT related facts and figure. References

1. MIS Report, Nepal Telecommunication Authority 2. MIS Report, Nepal Doorsanchar Company Limited. 3. ICT Fact Book , High Level Commission for Information Technology 4. Statistical Year Book, Central Bureau of Statistics.

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