Cell phone tariff rates down 70 percent in a decade
REPUBLICA
KATHMANDU, July 25: Telecom is one of the few sectors that has benefited from the government´s liberalization policy. After opening the market to the private sector, the tariff rates on mobile phone service, in particular, have dropped down by more than 70 percent, making it more affordable to everyone.
Take the change in Nepal Telecom´s tariff structure over the years for instance. When the country´s telecom giant first introduced mobile phone service in May 1999, it used to charge Rs 6 on every one minute call. It also used to slap a minimum monthly rental fee of Rs 1,000 and on top of that subscribers also had to pay Rs 3 for per minute of incoming calls.
Today, cell phone calls can be received free of cost, while per minute call rate on NT´s postpaid mobile phone service has come down to Rs 1.60 (excluding taxes) during peak hour, and Re 1 (excluding taxes) and Rs 0.75 during off peak hours. Likewise, monthly rental fee on postpaid service has also come down to Rs 400, which includes free talk time worth the entire amount.
The same is the case with NT´s prepaid cell phone service. The rate for per minute call on this service has now reduced to Rs 2 (excluding taxes) from Rs 4.50 when it was first introduced in early 2000.
These tariff reductions - which have largely benefited customers - largely came after the country moved towards a more liberalized telecom market in late 1990s. And the benefits of opening up the telecom sector started trickling even before Spice Nepal Private Limited (SNPL), the first privately-run cell phone company, launched its service in September 2005.
To brace for the competition with the SNPL, the NT, at that time, had reduced its per minute tariff rate on postpaid service to Rs 3 during peak hours from the existing Rs 3.60, while per minute prepaid tariff rate was brought down to Rs 3.50 from Rs 4.68. This price war has forced SNPL to revise its tariff rates several times.
Today, calls made from postpaid Mero Mobile to NT, which used to cost Rs 4.50 per minute at the time of launch, has come down to Rs 2.29. While postpaid calls made within Mero Mobile´s network cost only Rs 1.75 per minute.
This competition triggered by the entry of SNPL further revved up after United Telecom Limited (UTL) introduced limited mobility mobile phone service in March 2006. Although this service was initially limited to Kathmandu valley, the company´s decision to charge a tariff rate of Re 1 per minute on calls made to NT´s network and Rs 2 to SNPL´s network provided relief to many.
Commenting on the reduction in tariff rates, Surendra Prasad Thikey, spokesperson of the NT said, "Revision of tariff rates is a continuous process for every telecom company and cell phone users will definitely be able to access this service at an even cheaper rate in the days to come."
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Cell Phone Tariff Rates Down 70 Percent In A Decade
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