The Government of Nepal, in its budget for the fiscal year 2025/26, has announced plans to launch 5G services in the Kathmandu Valley and other major urban areas. However, despite the ambition, the rollout remains uncertain due to a combination of financial, regulatory, and structural challenges.
Nepal Telecom, the majority state-owned telecom provider, received government approval in late 2023 to conduct 5G trials but has not yet launched the service commercially. High deployment costs have reportedly delayed implementation. Meanwhile, Ncell, the country’s leading private telecom operator, has not been granted permission to begin 5G trials at all.
Jabbor Kayumov, CEO of Ncell, raised serious concerns about the financial viability of 5G deployment during a press interaction on Thursday, June 12, where he unveiled a comprehensive company report. He said that declining revenues across the telecom sector pose a major barrier to investing in 5G infrastructure.
“Telecom operators’ revenue has been falling for the past seven years,” Kayumov said. “If this trend continues, launching 5G services will be financially unfeasible.”
According to Ncell’s report, deploying 5G nationwide would require an estimated Rs 46 billion per operator over five years. Even under a restructured industry model, a cumulative loss of Rs 51 billion is projected, with internal cash flows insufficient to support the investment for at least six years.
The report also shows a sharp revenue decline in the telecom sector. Combined earnings of telecom companies fell from Rs 98.72 billion in fiscal year 2017/18 to Rs 68.43 billion in 2023/24. If the trend continues, revenues could shrink further to Rs 56.37 billion by 2027/28, Kayumov added.
Despite these financial setbacks, mobile data usage and smartphone penetration in Nepal are growing rapidly. By 2030, approximately 68 percent of smartphones imported into the country are expected to support 5G technology. Data consumption is projected to double, reaching levels similar to global averages. However, the report warns that the country’s digital infrastructure is not evolving fast enough to meet this rising demand.
Read: Roadblocks in 5G Rollout
Kayumov underscored that 5G is essential for Nepal to remain competitive in the global digital economy and enable transformative technologies like the Internet of Things (IoT). He called on the government to ease the cost burden on service providers to accelerate deployment.
To address these issues, the report outlines several policy recommendations. It calls for a transition to a subscription-based pricing model—where mobile services are sold as weekly or monthly packages, similar to practices in India. Kayumov said that Ncell plans to introduce such packages soon.
The report further recommends waiving spectrum fees until certain coverage thresholds are met, noting that current base-rate spectrum fees stand at Rs 955 million annually, which is unsustainable. It also proposes full customs duty exemptions on 5G equipment, tax rationalization for the telecom sector, and multi-operator infrastructure sharing, which could reduce deployment costs by 30 to 40 percent.
Another key recommendation is providing regulatory clarity on license renewals beyond 2029 to instill confidence in long-term investment. This issue is especially relevant to Ncell, whose 25-year telecom license is set to expire in 2029/30.
Adding to the uncertainty, the Nepal government has not yet recognized the ownership transfer of Ncell from Malaysian company Axiata to Spectrlite UK Limited, a firm owned by non-resident Nepali Satish Lal Acharya. As a result, questions remain about whether Ncell’s ownership could revert to the state after four years.
“5G is a long-term investment, and it takes many years to recover the cost,” Kayumov said. “As long as the licensing issue remains unresolved, investments cannot proceed. It’s also difficult to attract new investors under these conditions.”
Nepal and Pakistan are currently the only countries in South Asia without commercial 5G services. This puts Nepal at risk of falling behind in regional digital competitiveness.
“Nepal is demand-ready for 5G,” the Ncell report concludes, “but without structural reforms and coordinated policy support, the deployment of service will remain a distant dream.”
