Unhappiness about intra-SAARC and roaming charges in Nepal

Posted on January 20, 2010 / 4 Comments

Voice and Data has brought up two issues we have been pushing since 2008: intra-SAARC call prices and roaming prices. Our good friend Anand Raj Khanal, Secretary of the NTA, has said it is simply a matter between operators. Respectfully, we disagree. Lowering roaming charges in Nepal, when done by Nepal operators, benefits the customers of another country; it does not benefit Nepalese roaming in that country. If all the SAARC regulators agree on lowering roaming charges at the same time, this asymmetry goes away. I do not know whether all monopoly elements have been removed from Nepal’s international gateways, but unless that is done there is a need for regulatory intervention on termination prices as well.

UTL Nepal offers the minimum call rate to India. It is as low as NPR 3 on IP platform, and NPR 5 for normal calls to India. The company is banking on the fact that a large part of the Nepal’s population is working in various parts of India, as they do not require work permit. Interestingly, the international call rates from India to Nepal is around INR 10. UTL Nepal, for rest of SAARC countries offers a call rate of NPR 15 on normal calls, while on IP platform the call to Bangladesh and Pakistan is as low as NPR 8.

“We do not believe in doing business for profit only, but also for the betterment of mankind. We are offering the minimum tariff to India among all operators, and keeping our margin less. The aim is to serve all the subscribers who have relatives in India. This also helps to get better traffic than competition,” says S Kannan, CEO, UTL Telecom.

However, some of the operators charge subscribers as high as NPR 19 per minute for making any international call to any of the country during the peak hours. The tariff for the US and other countries of Asia is NPR 49 per minute.

Expensive Roaming

Roaming charges in the country are quite high. Indian mobile subscribers have to pay as high as INR 55 (NPR 88) per minute to receive any calls in Nepal. Similarly, to make calls back home India, one has to shell out INR 65 per minute (NPR 104).

4 Comments

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Ananda Raj Khanal
February 17, 2010, 3:27 pm
When I say, International Roaming is inter-operator trade issue, I meant to say that there is no legal and regulatory mechanism in place to dictate or regulate the roaming tariff- i do not know whether other regulators in the region do that. Even in the SAARC meeting it was agreed by the governments to reduce the international calls both origination and termination and also for the roaming-BUT government making decisions and regulators “wishing” does not make the difference- it is the greed of the operators that needs to be removed and bring the tariff at a reasonable level. We at Nepal tried to impose international termination rate ceiling BUT there was a vehement opposition from the operators. This is the reason I said it is an inter-operator issue.
Thanks
Ananda Raj Khanal
Director, NTA
1. Rohan Samarajiva
  
  February 17, 2010, 9:57 pm
  
  We greatly appreciate the intervention by the Director of the NTA.
  
  LIRNEasia’s first intervention in this area was focused not on roaming, but on the strangeness of intra-SAARC international calls being more expensive than calls to countries outside the SAARC. At the SAARC Summit of 2008, the heads of state indicated their interest in lowering roaming charges. Then the Chairman of TRAI requested us to provide information on roaming so the SATRC could act on the stated policy. We obliged. We also came up with a rationale for lowering roaming charges within the SAARC region.
  
  We do believe that regulators can act to lower international termination rates from SAARC countries which will have the effect of enabling lower intra-SAARC charges as well as lower roaming charges. Ideally all SAARC regulators will act at the same time because all SAARC citizens must be seen as benefiting, not only some.
  
  Or they can get even more directive like the European Commission.
Ananda Raj Khanal
March 5, 2010, 2:35 pm
Nepal Telecommunications Authority, on the occasion of its 12th Anniversary function organized an ” Industry-Regulator dialogue” on License harmonization: The Way Forward. The CEOs/Representatives of the six voice operators presented their postions on the issues raised in the concept note prepared for the same.
Except on the issue of service provisioning after 25 years, the total license period for the service no concrete opinions from the operator came. It was recommended that after 25 years, the government can either re-negotiate the license terms and conditions or go for auction.
However the program was successful in preparing grounds for discussion on very vital issue of maintaining the level playing field.

Such dialogue could be useful for other countries as well.
Thanks
Ananda Raj Khanal
Director
Nepal Telecommunications Authority
Concept note is attached here.
License Harmonization: The Way Forward
A concept note prepared for industry-regulator dialogue to be held during the 12th Anniversary of NTA; Falgun 20,2066 @ Hotel Shangrila, Kathmandu

1. Background
NTA so far has issued 6 voice service licenses under three categories of service differentiation: basic telecommunications service, GSM cellular mobile service and Rural Telecommunication service. The legal ground for issuing these licenses have been different as outlined in the Telecommunication Act,1997 and Telecommunications Regulations,1997. Value Added Service licenses have also been issued in a large number whenever there is an application for such service being filed at NTA.

These 6 voice service licenses have been issued at different times, with different government policy objectives and with different license terms and conditions. The above three categories now have been blurred from the technical perspectives. All of the 6 operators now have cellular spectrum in different sizes. The spectrum refarming has not been complete. They are capable of providing cellular mobile services from their existing infrastructure.

The situation has been further accentuated by the fact that voice no more needs circuit switching. Packet switching and in particular IP based networks using IP can very efficiently and effectively carry end-to-end voice traffic similar to data traffic.

Under these backdrops, the questions that most of the stakeholders raise at this particular point in time are what have happened to the “level playing field”? Is there any shortcut or one-size-fits all kind of solution to harmonize these licenses so that the level playing field is maintained. Next pertinent question is regarding the total license period- 25 Years term as set in the Telecommunications Act,1997. It is said that the entire infrastructure would be of the GoN after this period expires. What then will happen to the service? Consumers? Can the government run the operations so that the service is not disrupted? The GSM cellular mobile license renewal first after 10 years and then every five years paying NRs 20 B as committed by Spice Nepal Pvt. Ltd. which also applies to Nepal Telecom as well has already posed a regulatory challenge. A provisional renewal of NT’s Mobile license taking 90% of the License fees as applied to the other value added services and those voice services opened as per section 23(2) of the Telecommunications Act has raised certain questions about the economic feasibility and rationality of NRs 20B for the license renewal.

2. Objectives:
As outlined in the background, the major objectives of this dialogue are to find rational answers to the following questions:
i. Does the present licensing scenario pose any difficulty in maintaining the level playing field in the telecommunications sector? If yes, how? What can we do to harmonize these anomalies?
ii. Is the condition accepted/committed by Spice Nepal Pvt. Ltd and the then NTC to acquire the GSM cellular mobile license – particularly in terms of renewal fees and annual royalty for the first 10 years- a realistic one?
iii. The total license period as outlined in the Telecommunications Act could not exceed 25 years. What will happen to the telecommunications services after the expiry of such period though, it is said that the infrastructure will belong to the Government. Is it not necessary that the government ensures uninterrupted services to the customers?
iv. A number of issues have emerged sometimes having contradictory views and approaches between the government/regulator and the operators. For examples- in spectrum management issues, numbering management issues and infrastructure sharing and interconnection related issues. Having a holistic and a business oriented approach is essential for win-win solutions in such issues. How can we arrive at such amicable win-win solutions?
v. Any other issue that is pertinent at this point in time?
3. Methodology:
An interaction program will be held among the senior executives of concerned stakeholders-particularly the government ( MoIC), NTA, voice operators and other value added service providers. NTA will begin the interaction program by highlighting the background and objectives of the dialogue. The senior executives from the stakeholders will be given time to express their views. This discussion will be moderated for effective and efficient interaction. The Government and NTA will take these views and will make a humble initiative to bring out some kind of amicable solutions of the existing issues.
4. Program Schedule:
This dialogue will be a part of the NTA’s 12th anniversary function to be held on 20th Falgun, 2066. It will be followed by dinner and preceded by formal functions as set by NTA. The dialogue is expected to be concluded in not more than 1 and half hours.
The detailed program is printed in the invitation card.

This concept Note is prepared by: Ananda Raj Khanal, Director, NTA