Kathmandu: As the government ordered a nationwide shutdown of major social media platforms starting Thursday, internet service providers (ISPs) and telecom operators have warned of severe financial repercussions.
According to the decision, 26 social media platforms not registered with the Ministry of Communication and Information Technology have been blocked, including Facebook, WhatsApp, and YouTube — by far the most widely used platforms in the country.
ISPs say that nearly 80 percent of internet consumption in Nepal is linked to social media usage. With Facebook, WhatsApp, and YouTube now inaccessible, providers expect a drastic reduction in traffic.
“Most customers subscribe to the internet mainly to access social media. Once these services are unavailable, consumption rates will inevitably fall,” said Sudhir Parajuli, president of ISPAN, the association of internet service providers in Nepal.
Parajuli added that the losses would far exceed those suffered when the government previously banned TikTok. “This time, the biggest platforms have been shut down all at once,” he said.
Telecom companies, which derive a large share of their revenue from mobile data packages used primarily on Facebook and YouTube, are expected to take the hardest hit. Nepal Telecom spokesperson Rabindra Manandhar said early estimates suggest data consumption could drop by as much as 80 percent, severely impacting revenue streams.
Mobile data now accounts for roughly half of total telecom income. The shutdown comes at a time when providers are already burdened with high regulatory costs, including Rs 4 billion (US$ 30 million) annually for license renewal, as well as frequency fees. “With revenues shrinking and costs fixed, this decision effectively closes off our income streams,” one provider warned.
When TikTok was banned earlier, telecom operators reported losses of more than Rs 4 billion.
The shutdown is also disrupting Nepal’s growing digital economy. Businesses that rely on social media for promotion, sales, and customer engagement have been left stranded. Startups, content creators, and digital entrepreneurs say the move has created fresh uncertainty and could stall growth in Nepal’s digital sector.
The government had recently begun collecting a digital services tax at a rate of 2 percent on revenues generated in Nepal by global social media companies and digital platforms. According to the Inland Revenue Department, the tax had generated nearly Rs 50 million annually. Officials now warn that this revenue stream will also be affected by the shutdown.
The move follows the “Directive on Regulating Social Media Use, 2080,” which requires all platforms to be registered with the Ministry of Communications to operate in Nepal. The Cabinet meeting of August 25 decided to enforce the rule, giving companies until September 12 to comply.
When the deadline expired on September 19 without registration by several major platforms, the government instructed the Nepal Telecommunications Authority to enforce the ban until compliance.
Officials argue that registration is essential to bring global platforms under Nepal’s legal and tax jurisdiction. “Social media companies must be listed with the Ministry and pay taxes on their earnings in Nepal,” a government spokesperson said.
The digital services tax has gradually expanded since its introduction. According to the tax office, collections amounted to Rs 7 million in 2023/24, Rs 49 million in 2024/25, and Rs 1.1 million so far in the current fiscal year up to early September.
Despite this, the sudden shutdown has cast doubt over future collections, as companies like Facebook, YouTube, and Twitter have not yet registered with the government.
With the ban now in place, Nepal’s internet providers, telecom operators, businesses, and digital creators face growing uncertainty. While the government insists the measure is aimed at regulating global platforms and ensuring tax compliance, critics say it risks stifling digital innovation and cutting Nepal off from the global online economy.
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