SAARC mobile tariffs converging; competition (finally) drives down Nepal tariffs by 50 percent

Posted on March 12, 2009 / 2 Comments

LIRNEasia’s price-benchmarking research shows that Pakistan has overtaken Bangladesh as the country with the cheapest monthly prepaid costs in the SAARC region, when compared to September 2008. Pakistan recorded a monthly cost of USD 1.75 for a low user, followed by Bangladesh (USD 1.96) and India (USD 2.10).

The greatest drop in tariffs since September 2008 however was seen in Nepal which recorded a price drop of 50%. At first glance, the price drop appears unusual since Nepal’s mobile market looks like a duopoly between Nepal Telecom and Spice Nepal. The reality, however, is that although there are only two mobile operators in the market, operators such as United Telecom Limited (UTL) and Nepal Telecom also offer CDMA services based on Limited Mobility networks; the National Telecommunications Authorit y (NTA), Nepal, made recommendations for these operators to be granted full mobility rights in 2007, which would thus allow them to provide services similar to that of a normal mobile provider. Furthermore it appears that UTL is offering devices that look and operate like cell phones (unlike in Sri Lanka, where the CDMA operators provide phones that look like fixed phones). As such, the increased competition seems to be driving prices down.

Bhutan too has recorded a drop in prices by 27% since September 2008. Bhutan’s mobile market was a monopoly controlled by Bhutan Telecom Ltd; but the second operator’s (Tashi Infocomm Ltd) entry and start of operations is finally having some impact on the small mountain nation.

Prices continued to drop in other countries – Maldives and Sri Lanka recorded call tariff reductions of 18% and 10% respectively.

From the least expensive to the most expensive, the countries were Pakistan, Bangladesh, India, Nepal, Bhutan, Sri Lanka, the Maldives and Afghanistan.

Reduced cost does not necessarily mean increased affordability. For that, we also looked at USD PPP (purchasing power parity) adjusted costs. While Pakistan continued to be the most affordable, the ranking order changes. From lowest to highest, it is Pakistan, Bangladesh, Maldives, Sri Lanka, India, Nepal, Bhutan and Afghanistan.

The LIRNEasia study compares mobile prices in South and Southeast Asia using price baskets, derived from those used by the Organization for Economic Co-operation and Development (OECD). The baskets are calculated for low, medium and high users for pre- as well as post-paid packages, factoring in usage charges (voice as well as SMS), line rental, connection charges (depreciated over a three year period), and applicable taxes.

2 Comments

Madhu Prasad
October 15, 2009, 12:17 am
All other operators are useless, Reliance mobile gsm and cdma offers all locals and STD call on all network throughout india at just 50 paisa per minute with no tariff for lifetime.

And Tata indicom has presented great pay per minute call plan, all locals call at 1 rupee per 10 minute. Does any other operator such offers anywhere in world with top class network.
Nikunj
December 31, 2010, 2:06 am
why is call charges to nepal 10 rupee per minute?