Telecom companies struggle to attract landline subscribers

KATHMANDU: Subscription of once highly popular service — fixed line — has been declining steadily for last three years. More than 22,000 customers of this service have stopped using it over the period, according to Nepal Telecommunications Authority (NTA).

By mid-March this year, the penetration rate of fixed line (also known as landline or PSTN) declined to 3.12 per cent from 3.19 per cent in mid-March, 2012. While its rival service, mobile’s penetration rate surged to 77.92 per cent from 53.39 per cent three years ago, making wireless voice service available to eight out of 10 customers.

Telecom companies attribute the fall in user base to easy availability of other services for voice telephony, such as wireless GSM and CDMA mobile and companies themselves shifting focus from costly wire line service. Apart from being expensive in terms of investment, fixed line service has less room for adding values as it is an old technology.



NTA says that overall penetration rate of telephone service reached 87.20 per cent by mid-March 2014, taking total number of subscribers to 23.1 million. Except for Ncell, five companies — Nepal Telecom (NT), United Telecom Limited, Smart Telecom, Nepal Satellite Telecom and STM Telecom Sanchar — have been providing fixed line service apart from other services like limited mobility service.

The state-owned NT holds a majority share in fixed line service. In the current fiscal year, the company has set a target to attract 27,000 plus customers for landline subscription. However, by the first eight months (mid-July to mid-March) of the fiscal year, only 7,343 customers have subscribed to this service.

Subash Sah, acting chief of Fixed Line Service Directorate of NT, attributed the difficulty in attracting new subscriptions to decline in interest of customers over fixed lines due to expansion of other services as medium for voice communications. “That’s why we have been focusing on offering fixed line with value added services like ADSL in different parts of the country,” he added.

NT officials are confident that though landline has lost its charm in recent years, increasing demand for data service would also hike up the demand for fixed line as it can provide high speed internet. Interestingly, income from ADSL, which is available through fixed line, is higher compared to the income of all landline phones.

As an impact of changing technology, the company has been facing difficulties in keeping infrastructures updated and adding more facilities to fixed line. Moreover, NT is being bogged down by expenses in maintaining this service because of the involvement of a huge number of workforce in the service.

Source: THT