The Nepal Telecommunications Authority (NTA) is exploring the possibility of merging Internet Service Providers (ISPs) in Nepal to address the rapidly growing number of service providers and foster healthier competition in the market. NTA Chairman Bhupendra Bhandari highlighted the importance of mergers, noting that while acquisition and merger might not be necessary for all telecom companies, they are crucial for many ISPs struggling to survive in the competitive landscape.
Currently, Nepal has 107 licensed ISPs, but only a few are experiencing positive financial growth. Smaller ISPs, with fewer than 20,000 customers, are struggling to remain viable, contributing to an unhealthy market that could compromise the quality of internet services. The NTA is working on an ISP Mergers and Acquisition (M&A) policy to allow for smoother consolidations, which could address the industry’s growing inefficiency.
The idea of ISP mergers has been discussed in Nepal for some years, but the NTA now seems more determined than ever to implement a plan. This move is seen as necessary as the industry faces challenges due to the dominance of a few major players. WorldLink leads the market with over 1 million customers, while Nepal Telecom and Dish Home serve around 300,000 customers each. The competition is largely concentrated among the larger providers, leaving smaller ISPs with limited market share.
Despite the industry’s growth, with the internet market reaching Rs 26 billion, NTA Chairman Bhandari pointed out that many ISPs are facing revenue declines. He also noted that the growth in the fiber internet sector, which has seen over Rs 25 billion in revenue, has not been fully capitalized on by some telecom companies. Ncell, for example, has yet to venture into the fiber internet business, even though Nepal Telecom has already established its own fiber service under the NT Fiber brand.
The potential merger of ISPs would allow struggling companies to better strategize, consolidate resources, and grow their customer base, thereby improving overall service quality and competitiveness. Without such consolidation, many providers may struggle to survive in the increasingly competitive market.
By limiting the number of ISPs and focusing on quality, the NTA hopes to create a more robust and sustainable digital market, ultimately benefiting consumers.
