Nepal Telecom (NT) on Wednesday signed a memorandum of understanding with the Nepal  Telecommunications Authority (NTA) to lay optical fibre cable along the Mid-Hill Highway in the Eastern Region with financing from the Rural Telecom Development Fund (RTDF).

The cable will extend from Chiyo Bhanjyang in Panchthar district to Arughat in Gorkha district. NTA Chairman Digambar Jha and NT Managing Director Buddhi Prasad Acharya signed the deal on behalf of their respective organizations.

The cost of the project is not mentioned in the memorandum. “NT will now call for global tenders and select the company and award the contract to lay the optical fibre cable,” said Min Prasad Aryal, spokesperson for the NTA. “The authority will cover the entire cost from the RTDF.”

The two organizations will sign another agreement containing the technical details within a month. As per the memorandum of understanding, NT should use optical fibre cable of 96 core along the Mid-Hill Highway. Similarly, district headquarters should be connected to the highway with 48 core optical fibre cable and municipalities should be linked with 24 core cable. 

In regions where there are no roads, NT will install optical fibre cable using the electricity transmission poles of the Nepal Electricity Authority (NEA). The cable will be laid underground in places having access roads.

Meanwhile, in regions where there are both electricity poles and roads, microwave technology will be used to provide telephone and internet services, according to the accord. NT has been assigned to construct, operate and manage the optical fibre cable.

In the Western Region, the NTA will divide the cable project into two segments and award the contract to private companies based on competition. 

The RTDF was created 17 years ago with the aim of expanding telecommunication services to rural regions, but it has not been used till date. The fund currently contains Rs13 billion collected from different telecom service providers. Telecom service providers are required to contribute 2 percent of their annual income to the RTDF.