Telecom equipment imports down 18.25pc

KATHMANDU:

Import of telecommunication equipment declined by 18.25 per cent in the last fiscal year. The size of import came down as a result of Nepal Telecom (NT) procuring less equipment and

other companies not buying anything during the year.

Nepal Telecommunications Authority (NTA) said that its seven licensees, including two major companies — NT and Ncell — bought telecom network equipment worth Rs 6.85 billion.

In the previous fiscal year 2012-13, there had been an import of such equipment costing Rs 8.38 billion from international telecom vendors.

New equipment are imported for service expansion and upgrading of voice or data service and such equipment include structures for microwave and power equipment, mobile switching centres and

base station equipment. Namely, Huawei Technologies and ZTE Corporation are the two major telecommunication equipment suppliers to Nepal.

NT had imported equipment worth Rs 3.16 billion, against Rs 5.18 billion in the previous fiscal. Ncell, on the other hand, bought network equipment of Rs three billion, up from previous fiscal’s Rs 2.44 billion. Similarly, two other telecom companies — Nepal Satellite Telecom and Smart Telecom — invested Rs 661.12 million and Rs 7.86 million, respectively, in the review period.

Based on the Nepal Telecommunication Act 1997, government provision requires any licensee of NTA wishing to import equipment from the international market to get recommendation for receiving foreign exchange facility to pay for equipment imports. In the last five years, when the telecom industry witnessed rapid growth, telecom companies and internet service providers (ISPs) imported telecom equipment worth Rs 30.28 billion.

United Telecom and STM Telecom Sanchar that are targeting unified telecom licence for operation of nationwide GSM mobile service, did not place any orders in the year, according to NTA. However, two satellite phone service providers, Constellation and I4 Technologies, imported equipment worth Rs 4.73 million and

Rs 1.34 million, respectively.

NTA officials said that with the voice penetration rate already crossing 90 per cent of the total population, telecom companies’ investment is less likely to grow in voice. “Investment in telecom will grow further only after the government assigns spectrum for new services like long term evolution (LTE) or fourth generation (4G),” said an NTA official.

Otel Communication was the only ISP that procured equipment of Rs 4.2 million in the last fiscal year. It is a new ISP operating service after buying the licence of old ISP — Everest Net. In the current fiscal year, import from Smart Telecom is likely to rise as it has already sought permission of NTA to import telecom equipment for 200 plus base transceiver stations from ZTE Corporation to expand its mobile service under the unified licence.

Investment

Service Provider Amount

Nepal Telecom Rs 3.16bn

Ncell Rs 3bn

Nepal Satellite Telecom Rs 661.12m

Smart Telecom Rs 7.86m

I4 Technologies Rs 1.34m

Constellation Rs 4.73m

Otel Communication Rs 4.2m

Source: THT