Market share of ISPs stagnant despite special offers, tariff cuts

KATHMANDU, Jan 7:

Market share of Internet Service Providers´ (ISPs´) have remained stagnant for the past three years despite tariff reduction and introduction of attractive offers.

According to Nepal Telecommunications Authority (NTA), market share (in terms of number of subscribers) of ISPs is limited to a meager 1 percent due to easy availability of affordable mobile browsing packages.

“All telecom operators are ISPs at present. People today have cheaper alternatives for Internet,” Ananda Raj Khanal, director of Nepal Telecommunications Authority (NTA), said. “Internet on the move is giving touch challenge to ISPs. It is because of this fact that their mark share is not increasing.”

ISPs, which have so far been focusing on increasing market share in revenue, are now looking to increase subscribers as their new subscriber additions have been falling. As per the latest Management Information System (MIS) report for the first quarter of 2013/14, ISPs have only 89,219 subscribers. According to the report, there are 7.3 million Internet users in Nepal.

Though internet penetration increased from 19.92 percent to 27.92 percent in the first quarter of the current fiscal year, market share of ISPs have remained stagnant.

Bikash Gurung, head of retail marketing at Vianet - a leading ISP, said increasing load-shedding, disturbances in connections due to road expansion and use of Internet in portable devices have depressed market share of ISPs.

Of the 7.3 million Internet subscribers in the country, 6.9 million surf the net on their mobile phones.

Cheaper data packages offered by telcos, increased computing power at the household level, rapid growth in mobile subscription, and easy availability of cheaper mobile phones that support use of GPRS and smartphones are the major reasons behind rise in the number of Internet users, according to Internet Service Provider´s association of Nepal.

To regain the lost market share, ISPs have been slashing rates and announcing attractive offers. At the ongoing CAN Info-Tech, different companies like Subisu, Vianet and WebSurfer, among others, have introduced special packages at attractive rates.

Khanal, however, said the major problem with ISPs is that they are focused in certain areas only. “Though ISPs take nationwide license, they focus only on niche markets. Because of this the number of subscribers is limited and this definitely hampers the total market share,” added Khanal.

Besides, data services like ADSL, WiMax, CDMA wireless Internet, dial-up and mobile internet by Nepal Telecom and 3G and GPRS packages offered by Ncell has also hindered the growth of ISPs.

Source: Republica