On November 22, 2024, Prime Minister KP Sharma Oli held a conversation with US billionaire Elon Musk, the owner of Starlink - a satellite internet company. Oli later posted a photo on the social media platform X, stating, “A short while ago, during my conversation with Mr Elon Musk, I extended an invitation for him to visit Nepal.”

This was not the first interaction between Starlink officials with the government. Earlier that month, a Starlink delegation met with Oli and made a presentation and demonstration of its services. The team explained how Starlink operates and highlighted its potential to address Nepal’s connectivity challenges, given the country’s rugged terrain.

Led by Rebecca Skill Hunter, Starlink’s Director of Global Licensing and Market Activation the delegation discussed legal assurances, technical aspects, market strategy, entry plan and concerns about data and cyber security. Minister for Communications and Information Technology Prithvi Subba Gurung and other high-ranking government officials were present in the meeting.

Starlink's Engagement in South Asia

Since 2023, senior officials from SpaceX, the parent company of Starlink, have made multiple visits to Nepal. In June 2023, SpaceX officials met with then-Prime Minister Pushpa Kamal Dahal and other high-ranking government officials to explore the feasibility of Starlink services in Nepal, focusing on overcoming the country’s geographic and digital barriers.

Starlink’s ambitions extend across South Asia. Following Donald Trump's re-election as US President, SpaceX has intensified its efforts to enter the region. In March 2025, the company signed agreements with Indian telecom giants Airtel and Jio to explore Starlink services for business customers. On March 11, Bharti Airtel, India’s second largest telecom operator, announced its collaboration with SpaceX, emphasizing Starlink’s ability to connect remote communities, schools and healthcare facilities. The following day, Jio Platforms, India’s largest telecom firm, unveiled a similar deal with SpaceX.

The expansion continued when Pakistan granted Starlink temporary permission to operate on March 22, 2025. As more South Asian countries embrace Starlink, discussions about its potential entry into Nepal have gained momentum. The government has been assessing satellite-based internet as part of its broader digital transformation strategy, with plans to enable such services outlined in its policies and programs for the current fiscal year.

Regulatory Challenges and Starlink's Strategy

Despite growing interest, Starlink has not yet applied for a license from the Nepal Telecommunications Authority (NTA). The primary reason behind this is believed to be regulatory hurdles. Nepal’s telecommunications laws mandate that internet service providers (ISPs) register, secure licenses, meet specific conditions and pay applicable service fees. Under current regulations, foreign investors like Starlink are required to form partnership with a local stakeholder holding at least 20% share and obtain a telecommunications service license.

 

Starlink, however, is pushing for an alternative approach. According to government sources, the company wants to enter Nepal as a trading entity rather than a traditional ISP. Starlink argues that it does not need foreign investment approval, only permission to sell its satellite communication devices and operate through them. Starlink delivers internet via user terminals (dish antennas) connected to a constellation of low Earth orbit (LEO) satellites. Unlike Direct-to-Home (DTH) television, which provides one-way broadcasts, Starlink supports two-way communication, allowing users to both send and receive data. Since Starlink’s model differs from conventional ISPs, the company has urged Nepal to classify it as a trading business.

In response, the government has stated it will review existing legal provisions before taking a decision. “Existing policies allow companies with up to 80% foreign investment to provide telecommunications service in Nepal,” said Pradip Paudyal, Deputy Director of NTA. “Starlink could enter through an 80:20 partnership with a Nepali company, but its representatives have expressed a preference to operate independently.”

Need for Satellite-Based Services

According to NTA, broadband penetration in Nepal, based on subscription, stands at 135.35%. The country has 26 million mobile broadband and 13.47 million fixed broadband subscribers, with mobile broadband covering 89.16% of the population and fixed broadband reaching 46.19%. Yet, the International Telecommunication Union (ITU) reported that only 55.8% of the population used the internet in 2023.

Digital services experts point to a stark rural-urban divide and poor service quality behind this disparity.

Santosh Sigdel, Executive Director at Digital Rights Nepal, explained that internet reliability outside Kathmandu Valley remains poor, with frequent server outages disrupting government services. A recent World Bank report praised Nepal’s digital progress, but noted a significant gap in fixed broadband coverage. As a landlocked nation, Nepal relies on India and China for bandwidth which drives up costs and brings regulatory complexities. In 2023, Nepali companies spent Rs 4.7 billion on bandwidth imports. Nearly half the population lives more than 10 km from fiber-optic infrastructure, and legal disputes have stalled government efforts to expand access.

While urban areas enjoy better connectivity, rural and remote regions lag behind. Some experts see satellite-based internet as a practical solution. With Indian telecom giants partnering with SpaceX, calls to bring Starlink to Nepal have grown louder.

Local ISPs and Starlink's Market Impact

As the government weighs Starlink’s entry, local ISPs argue that it would complement rather than threaten their services. Starlink representatives have reportedly engaged with local ISPs to discuss potential collaborations.

 

Globally, Starlink has disrupted markets by undercutting local operators. A Rest of the World analysis in January found that its monthly subscription costs less than the leading fixed internet provider in at least five of the 16 African countries where it operates. Nepal, however, boasts some of the world’s cheapest internet services.

“Starlink’s satellite-based service cannot compete with our fiber-optic networks on price,” said Sudhir Parajuli, President of the Internet Service Provider Association of Nepal (ISPAN). “We have struggled to extend fiber to remote areas due to geographical difficulties. Starlink could serve as a secondary link.”

Dileep Agrawal, CEO of Worldlink Communications - Nepal’s leading broadband provider with a 32% market share, agreed. “If Starlink enters Nepal, it will not replace existing ISPs,” he said. “It could benefit remote communities where fiber expansion is not feasible. We offer internet for as low as Rs 900-1,000 per month, while Starlink’s pricing is significantly higher.”

Global Pricing and Affordability Concerns

According to the World Population Review, broadband plans in Nepal averaged around $10 per month in 2024, compared to $458 in the Solomon Islands - the world’s most expensive market. However, a March 2025 World Bank report states that fixed broadband in Nepal remains expensive relative to income levels. While mobile broadband prices have dropped to 2.14% of Gross National Income (GNI) per capita, fixed broadband still costs 7.8% of GNI in Nepal. The report attributes these elevated costs to "heavy taxation in the ICT sector”.

Starlink's pricing varies by region. In February 2025, it launched services in Bhutan. According to Bhutanese national newspaper Kuensel, Starlink offers a range of plans tailored to residential, business, government and mobile users. Monthly costs span from Nu 3,000 (Rs 4,800) to Nu 2.1 million (Rs 3.36 million). The company’s entry-level ‘Residential Lite’ plan costs Nu 3,000 per month, delivering speeds of 23-100 Mbps with unlimited data. The standard residential plan, priced at Nu 4,200, provides speeds of 25-110 Mbps.

By comparison, Bhutan Telecom (BT) charges Nu 550 per Mbps, with a minimum subscription of 2 Mbps. This translates to roughly Nu 12,650 for a 23 Mbps plan or Nu 13,750 for 25 Mbps. On the other hand, TashiCell’s standard broadband package starts at Nu 675 for speeds between 2 and 99 Mbps, with its premium package costing Nu 1,000. For business, government and institutional users, Starlink provides priority plans with speeds of 50-220 Mbps. These plans range from Nu 5,900 for 40 GB of data to Nu 106,000 for 6 TB.

Although Starlink promises faster speeds, the affordability of its plans compared to existing providers raises concerns about its adoption, especially for middle-income households.

 

Sigdel of Digital Rights Nepal echoes this same concern. “Corporate sectors, banks and private entities in rural areas might be able to afford it, but can Starlink truly serve the general population in remote regions? Access to information is a fundamental right, so it must be a priority.”

There are regulatory issues as well. “Content regulation has become a key issue today. While NTA oversees ISPs, how Starlink will enter Nepal and be regulated remains unclear.”

Geopolitical Concerns

Geopolitical dynamics reportedly factor into Nepal’s delayed Nepal’s 5G rollout. Nepal Telecom, the state-owned operator, plans to deploy 5G using Chinese equipment. Although successful trials were held two years ago, commercial services have yet to launch. Tests in Kathmandu and Pokhara in 2019 showed promise, but high operational costs and a lack of compatible devices have stalled progress. Some experts point to geopolitical pressures, particularly from India and the US, over equipment sourcing as an additional hurdle. Starlink’s potential entry into Nepal may face similar geopolitical scrutiny. Analysts suggest that US-China tensions and regional security concerns could influence its rollout.

Former Nepali Ambassador to China Bishnu Pukar Shrestha said questions may arise about the data Starlink’s satellites collect. “Given Nepal’s delicate diplomatic position, security implications need thorough consideration,” he added

While satellite internet could narrow Nepal’s digital divide, observers say that regulatory, economic and geopolitical obstacles must be resolved before any decisions are made.

(This news report was originally published in   April 2025   issue of New Business Age Magazine.)