Nepal’s telecom sector, currently dominated by two major providers, may see the entry of additional operators as the government explores options to improve service quality and affordability. Minister for Communication and Information Technology Bikram Timilsina has indicated support for introducing “one or even more” new telecom companies, prompting the Nepal Telecommunications Authority (NTA) to establish a committee to evaluate the possible expansion. The committee’s recommendations are pending.

The move addresses longstanding customer dissatisfaction with the existing providers—Nepal Telecom, majority government-owned, and Ncell, a public limited company. Users have reported inconsistent service and comparatively high costs. Advocates argue that increasing the number of service providers could foster competition, ultimately leading to improved service and more competitive pricing.

However, the idea is not new. Previous governments have undertaken similar reviews, identified potential applicants, and prepared studies, but no substantial changes have followed. Analysts point to vested interests within the sector as a factor limiting progress, with current operators reportedly lobbying to restrict competition. However, infrastructure limitations also pose significant challenges. The scarcity of radio frequency spectrum and difficulties in securing rights-of-way for network infrastructure are critical barriers that complicate the entry of new players.

Moreover, some experts warn that adding more operators under current conditions could strain existing infrastructure, potentially degrading rather than enhancing service quality. Despite these concerns, proponents believe the government’s efforts to introduce new entrants are justified. Nepal’s telecommunications usage remains low by regional standards; for instance, average monthly data consumption per user stands at just 4GB, the lowest in South Asia. Strengthening infrastructure and regulatory frameworks could create a more conducive environment for new competitors, thus encouraging higher adoption rates and better services.

Given the sector’s lucrative nature—Nepal Telecom reported revenues of Rs 38.7 billion in the last fiscal year—there are concerns about transparency and fairness in the liberalisation process. Observers emphasize the need for rigorous oversight from the Prime Minister’s Office to prevent conflicts of interest or corrupt practices among officials during this transition.

The current government, led by Prime Minister Balendra Shah on a platform of clean governance and efficient service delivery, views telecom reforms as an opportunity to propel the country’s digital transformation. If successfully managed, the introduction of new telecom operators could represent a significant step forward for Nepal’s connectivity and broader economic development.