Print Edition - 2014-05-18 | MONEY
Govt mulls new co to build telecom infra
May 17, 2014-
The government is mulling establishing a new company to build infrastructure for use in the telecommunication sector in a bid to eliminate costly duplication of efforts by phone companies and overcome disagreements over sharing resources.
The Nepal Telecommunication Authority (NTA) came up with the idea as telecom companies were spending a lot of money on infrastructure forcing them to compromise on the quality of service. According to the NTA, infrastructure eats up as much as 60 percent of the outlay of telecom companies.
“We are currently discussing the possibility of establishing a separate company and have not reached any conclusion yet,” said Suman Prasad Sharma, secretary at the Ministry of Information and Communication.
It is expected that telephone companies will be free to concentrate on improving the quality of their service if the proposed company takes care of the infrastructure part like erecting antenna towers.
“Infrastructure and service are two different aspects, and the trend of treating them separately has been established as the current global trend,” said Ananda Raj Khanal, director at the NTA. “If the new company is established for infrastructure, telecom companies may focus on service quality.”
As per the NTA’s plans, telecommunication service providers will have a stake in the company to be formed. It will look after infrastructure development for use by all the players.
“An in-depth audit should be carried out to find out the current infrastructure status of telecom companies and how much they have invested in infrastructure development,” said Khanal.
An NTA report released four years ago had stated that sharing infrastructure would help the companies to increase their profits and expand their services. The report had envisioned that phone companies would share their infrastructure to cut operating costs, but the plan did not move forward.
Meanwhile, telecom companies have been erecting more and more Base Transceiver Stations (BTS) as their customer base swelled.
As of now, there are around 5,000 BTS towers nationwide for providing telecommunication service.
The concept of infrastructure sharing is practiced in two ways basically. First, matters like towers and their locations are shared. Second, the mobile network, roaming and frequency are shared.
Nepal Telecom Managing Director Anup Ranjan Bhattarai said infrastructure plays a crucial role in making telecom services affordable. “To increase accessibility and lower tariff rates, telecom service providers should come to a common ground where they can share new as well as existing infrastructure,” said Bhattarai.
Telecom companies welcomed the idea of a separate infrastructure company that would cater to their needs. “The concept of infrastructure sharing would benefit all the companies, but the idea of setting up a separate company needs to be discussed,” said an official of a leading telecom service provider. “But if the concept is about establishing a government entity for infrastructure sharing, it might not be successful,” he added.
Infrastructure sharing is done in India, Sweden, France, Singapore, America, China and other countries.
Published: 18-05-2014 09:16