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Internet providers say they will not hike data costs if service charge is dropped

- PRAHLAD RIJAL, Kathmandu

Jun 15, 2019-

Internet service providers are mulling to call off a proposed hike in data costs after the government decided to discontinue a 13 percent telecommunications service charge on broadband support equipment and maintenance.

Officials of the Internet Service Providers’ Association said that if the government enforced the new provision by publishing it in the Nepal Gazette, they would not hike the charges from July 17 as previously planned.

“It is a welcome move, albeit late. And we are waiting for the full disclosure of the new telecommunications service charge in the gazette,” said Bhoj Raj Bhatta, president of the association.

“If the revision is in line with the past agreement made between us and the government, the charges will not be hiked.”

The move by service providers to review the proposed hike came a day after the government announced it would stop levying the 13 percent telecommunications service charge on routers, intranet and lease line connectivity and maintenance surcharges.

Last month, internet service providers had warned that the data fee charged to internet users would go up sharply because of the government’s decision to continue levying the telecommunications service charge in the next fiscal year.

A year ago, the service providers had agreed, following a public outcry, to adjust the telecommunications service charge in their costs and not pass it on to their customers if the government promised to discontinue the tax from the next fiscal year.

Following warnings by service providers of a price hike last month, authorities have finally moved to stop imposing the service charge on support equipment to the relief of both sellers and consumers.

Internet service providers are also waiting for the government to confirm that they will be allowed to break down internet utility bills as agreed previously. The companies will then be permitted to bill their customers separately for broadband and equipment and maintenance. “A categorisation of the charges will make things transparent for both consumers and service providers,” said Bhatta.

If the new tariff goes into effect, customers will be paying Rs1,680 monthly for broadband connectivity, 20 percent more than the prevailing charge of Rs1,400.

The government’s plan to bring down internet charges by 2018 in line with the Broadband Policy 2015 has not happened, and Nepal remains among countries with the most expensive internet.

As per the Inclusive Internet Index 2019, “Nepal places near the bottom of Asian nations—4th-last overall and last for Affordability with a global rank of 72nd out of 100. Nonetheless, it performs well relative to other low-income countries, ranking 1st for Availability and Readiness.” The Nepal Telecommunications Authority has decided to mobilise the Rural Telecommunication Development Fund collected every year from telecommunications service providers and build a broadband network using optical fibre and microwave technology in 13 districts of four provinces.

The authority has invited applications from internet service providers to execute broadband projects, and said it would provide subsidies to the selected service provider to implement the plan.

“The Nepal Telecommunic-ations Authority will provide subsidies from the Rural Telecommunication Develo-pment Fund to the successful applicant to establish a broadband hybrid network and provide data access connectivity in municipalities, rural municipalities, ward offices, health posts and public educational institutions (higher secondary schools and secondary schools),” said the authority.

Hopeful candidates must have contributed Rs1 million to the fund in the last three years. They must also have a minimum of 1,000 km of transmission network in operation, and a minimum of 25,000 fixed internet or data subscribers.

Published: 15-06-2019 08:25

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