On February 24, the Indian government announced that 5G services had been extended to 70 cities. In contrast, Nepal has yet to determine an official launch date for its 5G services.
India began its 5G rollout in 2019, starting with major cities such as Delhi, Mumbai, Chennai, Ahmedabad, Gandhinagar, Gurugram, Hyderabad, Kolkata, Ramnagar, Lucknow, and Pune.
Nepal Telecom conducted successful 5G trials two years ago but has not yet launched commercial services. Despite testing the technology in Kathmandu and Pokhara in 2019, the rollout has been delayed due to a lack of compatible devices and high operational costs. The Nepal Telecommunications Authority (NTA) has stated that it is prepared to approve 5G operations within a week of receiving applications from operators.
Investment and Legal Hurdles
NTA Chairman Bhupendra Bhandari noted that declining profitability among telecom companies has hampered 5G investments. The government requires operators to conduct trials and submit income reports before granting commercial licenses, creating additional challenges.
Although Nepal Telecom received approval for trials, Ncell has yet to secure permission due to ongoing legal disputes with the NTA.
The financial strain is evident, with Nepal Telecom's annual income plummeting from Rs 44.42 billion in Fiscal Year 2019/20 to just Rs 11 billion in the last fiscal year. Profitability has remained stagnant over the past five years.
The estimated cost of 5G expansion is around USD 500 million (approximately Rs 70 billion). Even if Ncell were to convert all its assets into investment, the funds would still fall short, Ncell CEO Jabbor Kayumov said at a program organized by SEJON last week.
Technological and Regulatory Challenges
Nepal Telecom postponed further 5G expansion due to a lack of compatible devices, while Ncell has not yet received approval for trials. Telecom companies have cited declining income and the high cost of technology investments as major barriers to 5G development.
The NTA has emphasized that foreign investment is crucial for high-cost projects and that the government must create a conducive investment environment. While the 700 MHz and 2600 MHz frequency bands are available for 5G, optimizing frequencies allocated to previous bands, such as 4G, remains necessary.
Some experts speculate that geopolitical factors could be contributing to the delay, with concerns about pressure from India and the USA regarding equipment sourcing.
Bhandari stated that Nepal can launch 5G in eight major cities, providing high-speed wireless connectivity dismissing the concerns that the technology for 5G is expensive.
The launch of 5G service would enhance data transmission speeds, reduce latency from 45 milliseconds to just 1 millisecond, and facilitate technologies such as remote control systems.
