My recent post in my blog was about the wish list to the regulator. However, since I feel that the sensitivity of the issue needs larger readership, I have sought this platform being more specific.
One wish for the regulator was about applying of a sensible tax and tariff regime to network operators in order to allow meaningful returns are very important to stimulate long term investment in infrastructure. It is expected from the regulator that the industry boundaries are not broken, forcing the mobile operators to terminate low quality, cheap ILD VoIP calls to our networks.
Quite a many people have provided feedback on VoIP issue. There is no doubt that VoIP can be a challenge to operators. But, only if the government makes false decisions such as allowing business models and industries to be mixed by regulation. Some background at my earlier post in July 2011 named “VoIP”.
VoIP is an excellent technology used effectively by large mass of consumers and business e.g. in Skype including us. VoIP in computer to computer is very cheap compared to mobile calls for instance which is understandable. However, forcing mobile operators to terminate cheap and low quality VoIP calls to billion dollar mobile networks does not make any sense.
In Nepal, NTA is for reason unknown, very eager to introduce regulated price for terminating VoIP calls to mobile networks and thus, aiming to harm the newly built mobile infrastructure and decrease the tax revenues payable to the government. I fail to understand the logic as to why a government agency itself would want to influence negatively in the development of the country.
Let’s have some easy mathematics. Estimated revenue that NT and Ncell get from foreign operators for terminating the traffic is about Rs 20 billion in a yearly basis. Now, NTA is proposing to slash the termination rate in Nepal, between operators and Internet Service Providers to 72 paisa per minute. This means that the revenues would only be 10 percent of the current estimated revenue of 20 billion NPR which will come down to a mere 2 billion. Loss for the government of Nepal as lost taxes would be on the level of Rs 5.5 billion (VAT, revenue based license fees, rural development fund, frequency fees etc) happens to be close to the revenue gap of Rs 4 billion which is missing from the government coffer right now. Loss for the mobile operators in this process would amount to about Rs 18 billion. Why would anyone want to do it when the government aims to attract more foreign investors to build the infrastructure of the country? Ncell has invested a mammoth $300 in telecom infrastructure. Now the lollipop is in risk to be given to free lickers.
NTA’s argument has been twofold:
By the regulation, the illegal call bypass will be in control.
- Good argument, but it is three years late; at Ncell network the illegal call bypass is next to zero! Same level is at NTC, thanks to us and Nepal Police who have earned a lot of tax money to the Government of Nepal.
Calling from Nepal is cheaper than calling to Nepal. To Nepal, prices should be lower.
- Domestic regulation in Nepal has no influence on tariffs decided in Qatar, Malaysia or US if the operators in those countries do not want to. And why should they?
- With the income that we get from abroad, we have afforded to reduce our tariffs to many destinations from Nepal. Why should we be punished for the good job done for the benefit of Nepali people?
If what the regulators propose will be implemented, ISP will be the sole beneficiary in Nepal.
Someone has nominated the $40 million Asia Development Fund to be the driver. Why should ADB deliver money to technology restricted project in rural areas when NTC and Ncell could build effectively a modern, high speed 3G network for both voice and data? With $40 million, one can build roughly 250 green field mobile base stations plus transmission. The backbone can be built easily with the money in the Rural Development Fund, existing money at NTA’s account paid by Nepali customers.
You are welcome to comment and continue discussion at the CEO blog http://blog.ncell.com.np