Kathmandu: Short-sighted policies by Nepal’s telecom regulator are blamed for hindering technological progress and depriving more than 25 million mobile data users of modern services.
Critics say the Nepal Telecommunications Authority has not only discouraged competition by allowing service providers to dwindle, but has also failed to support existing operators in expanding services, leaving ordinary citizens without access to advanced technology.
The regulator’s lack of cooperation has effectively delayed the rollout of 5G in Nepal, while companies willing to invest and expand have faced bureaucratic roadblocks. As a result, both the telecom industry and the scope of technology available to the public have shrunk.
Data from the authority shows that by mid-fiscal year 2025/26, there were around 26.4 million 4G users in Nepal, including 24.4 million from Nepal Telecom and 11.9 million from Ncell. These users are expected to form the base for future 5G adoption, but delays in policy decisions are limiting their access to next-generation services.
Under the leadership of Bhupendra Bhandari, the regulator has faced criticism for indecision and obstruction. Despite completing two years in office, he has yet to make major long-term policy decisions. Even the case of Smart Telecom, whose license was revoked, remains unresolved after three years.
Nepal’s telecom market, which once had as many as six service providers, has now shrunk to just two, Nepal Telecom and Ncell, largely due to regulatory inefficiencies. Observers argue that instead of fostering competition, the regulator has increasingly restricted it, further slowing sectoral growth. The situation is compounded by the state-owned operator’s reluctance to openly criticise the regulator and the general neglect of issues faced by private players like Ncell, which contributes to Nepal lagging in technological adoption.
A recent progress report on projects funded by the Rural Telecommunications Development Fund (RTDF) further highlights the regulator’s inefficiency. Despite collecting 2 percent of revenue from telecom operators for rural connectivity projects, progress remains uneven. While more than 60 percent of work has been completed in five provinces, projects in two provinces have yet to even begin.
The authority is also responsible for building a nationwide information highway through optical fibre networks along the Mid-Hill Highway and district headquarters. Of the three project packages, the first and third have reached about 61 percent completion on average, with nearly Rs 2 billion already spent.
In the first package, 1,449 kilometres of optical fibre have been laid out of a planned 2,179 kilometres, while in the third, 652 kilometres have been completed out of 1,154 kilometres.
However, the second package remains stalled. Originally awarded in 2017 to United Telecom Limited, a company that lacked the capacity to execute the project, the work never even began. Only after years of delay was the project reassigned to Nepal Telecom last year. Nepal Telecom is now preparing a detailed project report to lay about 1,900 kilometers of optical fibre across 23 districts in Gandaki and Lumbini provinces.
The regulator admits the delay but attributes it to legal complications. After terminating UTL’s contract for failing to meet its two-year deadline, the decision was challenged in the Supreme Court. The case was only resolved in January 2024, allowing the authority to proceed. The regulator also confirmed it had confiscated advance payments and performance guarantees from UTL before handing the project to a new operator.
Overall, critics argue that poor regulatory decisions, delayed actions, and weak oversight have not only slowed infrastructure development but also limited Nepal’s digital future, leaving millions of users waiting for services that the rest of the world is already beginning to take for granted.
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