Thursday, April 9, 2009

5.5 million telephone subscribers in Nepal

That’s 45% increase from last year, yet the telephone penetration is exceedingly low when compared to other counterparts in the region (see the figure below). A news report says that the current telephone penetration rate is around 20.45%. Good news? Probably yes, but still there is a lot to be achieved. There is tremendous demand of telephone services, however supply has not been consistent with demand. The government still tightly controls this industry and has only allowed two private firms to enter the market.

Nepal’s telephone penetration rate also shot up to 20.45 percent from less than 1.5 percent seven years ago on the back of easy availability of mobile phone lines. The country now has a total of 4.7 million mobile phone users and they make up almost 85 percent of telephone users in the country.

It is not surprising that even with the entry of new players in the market, profits and subscribers for all the three telecom providers (including the state-owned NTC, which used to enjoy monopoly until few years back) have increased by multiple folds. There is nothing to lose by further liberalizing this sector. More subscribers, more penetration, more firms, more employment, more revenue, more connectivity, more (probably) productive economic activity…its all win-win-…-win situations.

India, which has been adding 8 million new customers to its telephone network every month for the last two years, has a tele-density of 33.28 percent. Maldives has already attained 100 percent telephone penetration. Pakistan, Bangladesh and Sri Lanka are also ahead of Nepal. And even a closed country like Bhutan attained a tele-density of 20.6 percent back in 2007.

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