Nepal approved foreign exchange worth more than Rs. 9 billion for telecommunications equipment imports and bandwidth payments in the fiscal year 2024/25, according to the Nepal Telecommunications Authority (NTA).

The authority recommended foreign exchange worth approximately Rs. 3.54 billion for equipment imports and Rs. 5.55 billion for bandwidth payments, bringing the total to more than Rs. 9 billion. Established in February 1998, the NTA is the regulatory body responsible for Nepal's telecommunications sector.

According to NTA Information Officer Revati Ram Panth, the authority has helped create a competitive environment for the development, expansion, and operation of telecommunications services nationwide, including through private-sector participation.

Telecom Sector Contributes Billions in Government Revenue

Telecommunications service providers deposited Rs. 3.44 billion in royalty payments into the government's revenue account during FY 2024/25. The royalty represents 4% of the providers' annual income. In addition, approximately Rs. 2.32 billion was deposited into the Rural Telecommunications Development Fund, according to the authority.

The NTA is reportedly in the final stages of preparing the details for FY 2025/26, which are expected to be submitted by the end of Ashoj.

Telecommunications has become an important contributor to Nepal's economic and social development. Mobile networks, broadband internet, digital banking, online education, telemedicine, and digital government services have expanded access to information and essential services, including in remote areas.

The sector has also helped businesses promote and sell products online, supported agricultural information services, and created employment opportunities in network construction, software development, tower operations, and telecommunications equipment distribution.

Telecom Sector's Contribution to the Economy

According to the National Statistics Office, the telecommunications sector accounts for approximately 1.5% of Nepal's economy. NTA figures indicate that telecommunications alone has contributed around 1.47% to the economy, while the broader information technology sector has made a larger contribution.

Despite this role, experts have noted that the sector's overall economic contribution requires more detailed research.

The NTA has also revoked the registrations of several privately operated telecom companies over the past five years, including Hello Mobile, CG Mobile, Smart, and UTL. Nepal Telecom and Ncell Axiata remain the country's major mobile service providers.

Telecom Operators Face Multiple Tax Obligations

Internet Service Providers Association of Nepal (ISPAN) has highlighted the range of taxes and charges imposed on service providers. These include a 4% royalty on annual income, a 2% contribution to the Rural Telecommunications Development Fund, a 13% telecommunications service charge, 13% VAT, and other applicable taxes.

Telecommunications infrastructure imports are also subject to duties, including the reported 15% tax on optical fiber cables and 5% on equipment such as routers.

Experts have called for a review of the sector's tax and regulatory framework, arguing that policy should account not only for government revenue but also for investment, employment, affordable connectivity, and the growth of Nepal's digital economy.

Mobile and Broadband Subscriber Figures

According to the figures cited in the report, Nepal Telecom had approximately 16.31 million customers, while Ncell had around 14.05 million. These figures represent subscriptions or customer connections, not necessarily unique individuals, because one person may use multiple SIM cards.

The report also lists approximately 26.95 million 4G mobile broadband users and 741,409 3G users. Fixed wired broadband connections stood at around 3.56 million, while fixed wireless broadband connections totaled approximately 29,817.

Experts have emphasized the need for a long-term telecommunications policy that supports affordable services and continued investment as technology evolves. A comprehensive review could cover royalties, spectrum charges, license renewals, rural telecommunications contributions, and license periods.