NEA to Establish Telecom Infrastructure Company

The Nepal Electricity Authority (NEA) has decided to establish a telecommunications infrastructure company to lease infrastructure to telecom service providers.

A recent meeting of the NEA Board of Directors approved a proposal to set up the company, an NEA board member told New Business Age on condition of anonymity. The company will lease infrastructure to both public and private telecom service providers.

“We have already decided to establish a telecom infrastructure company through a board meeting. The objective is to lease infrastructure to private and public telecom service providers,” the board member said.

The proposal to form a telecom infrastructure subsidiary was initially approved in July.

According to the board member, the primary objective of establishing the company is to commercially utilise the physical infrastructure already owned by the NEA. The authority has an extensive network of 33 kV, 132 kV and 400 kV transmission towers across the country, as well as underground lines and structures suitable for laying optical fibre in major cities.

Using these facilities, the proposed company plans to lease infrastructure services to telecom operators, internet service providers, network service providers, the Nepal Police, local governments and other stakeholders.

At present, several internet service providers are already using NEA’s electricity poles by paying rental fees. About three years ago, disputes had also surfaced between the NEA and internet service providers over pole rental charges.

The proposed company will be fully owned by the NEA. While additional approval from the government or the Council of Ministers will not be required, the company will need to obtain a licence from the Nepal Telecommunications Authority, the NEA said.

The organisational structure of the company has yet to be finalised, as the initiative remains at the conceptual stage. The board has assigned the managing director to carry out preliminary work, including preparing proposals on the company’s structure, operating modality, required workforce and investment.

“The managing director will prepare a proposal covering structure, modality, manpower and investment. The board will then discuss it again and take a final decision,” the board member said, adding that all appointments and management processes will proceed through the board.

The NEA clarified that the company will not operate telecom services itself. “We will not be a service provider. We will only provide infrastructure,” the board member said. “Other companies will use our infrastructure to run their services, and we will earn rental income. In simple terms, this will become a major new source of revenue for the NEA.”

According to the board member, the NEA had earlier considered establishing the company jointly with Nepal Telecom. “However, when Nepal Telecom did not show the required readiness, the NEA decided to proceed on its own,” he said.

While details on investment requirements have yet to be finalised, the board member expressed confidence that the company would be financially beneficial for the NEA. “The infrastructure is already in place, the network spans the country, and underground cabling is possible in major cities. Leasing such infrastructure provides a steady revenue model,” he said.