Ncell, a leading private sector telecommunications company of Nepal, has announced plans to transition to a subscription-based model, requiring customers to purchase voice and data services for at least one month. This move comes as the company aims to counter declining revenues in recent years.
In preparation, Ncell has already discontinued short-term service packages of 1 to 3 days. The company plans to introduce packages with a minimum duration of 28 days, mirroring practices in countries like India. “This model is based on customer commitment to using Ncell’s services,” said Ncell CEO Jabbor Kayumov. “We aim to implement this model within the next six months, pending approval from the Nepal Telecommunications Authority (NTA).”
The Nepal Telecommunications Authority confirmed receiving Ncell’s proposal. “We are in discussions for least one-month packages for the benefit of both the customers and service provider,” said NTA Director Arjun Ghimire. He added that the authority is also working to regulate the current fragmented packages and their pricing.
Ghimire said discussions are underway to replace shorter packages of 1, 3, and 7 days with packages of a minimum validity of 30 days. Both Ncell and Nepal Telecom have indicated their readiness to adopt this approach, citing the need to ensure the sustainability of the telecom sector amid declining revenues.
Ncell reports that the total income of telecom service providers in Nepal has dropped from Rs 97.3 billion in FY 2016/17 to Rs 68.63 billion in FY 2023/24. As a result, reinvestment in the sector has also declined, falling from Rs 18.98 billion to Rs 8.41 billion during the same period.
The company believes a subscription-based model will help reverse this trend by fostering customer loyalty and increasing data consumption. Ncell noted that average monthly data consumption in Nepal is currently 4 GB per person, compared to 20 GB in India, where telecom providers have adopted long-term subscription models.
Kayumov emphasized that long-term packages will be designed to offer "value for money" and will be tailored to customers’ purchasing power. “Short-term packages make data expensive, but with long-term plans, data costs will decrease, encouraging higher consumption,” he said.
Nepal Telecom also appears ready to align with the one-month package model. Spokesperson Hari Dhakal stated that the company is reviewing its packages to address customer needs while maintaining service quality. “Voice revenue has significantly declined, and we are strategizing to counter the impact of over-the-top (OTT) platforms,” Dhakal said.
5G Rollout Uncertain
Despite the global expansion of 5G services, including in India and China, Nepal's 5G rollout remains uncertain. Kayumov revealed that Ncell has not received approval from the NTA to test 5G services, despite submitting a request two years ago.
The company estimates that deploying 5G in Nepal would require an annual investment of Rs 20 billion for three to five years. However, with reinvestment across telecom providers limited to Rs 8.41 billion last fiscal year, Kayumov expressed doubts about the feasibility of introducing 5G under current financial constraints.
This shift toward long-term subscription models could be a pivotal step in ensuring the sustainability of Nepal's telecom sector while laying the groundwork for future advancements like 5G.
