Introduction of Telecommunication Industry of Nepal

INTRODUCTION OF TELECOMMUNICATION INDUSTRY OF NEPAL

A telecommunication system consists of three basic elements: a transmitter that takes information and converts it to a signal; a transmission medium that carries the signal; and, a receiver that receives the signal and converts it back into usable information. The world history of development of telecommunication is very long. But the history of telecommunication in Nepal is rather very young as compared to the history and culture of Nepalese people. Telecommunication was introduced with the installation of open wire trunk telephone line between Kathmandu and Birgunj (a boarder town in southern Nepal) for the first time in Nepal around 1914 beginning of the First World War.

Until 2003, Nepal Telecom (NT) formerly known as Nepal Telecommunication Corporation (NTC) was the only state owned telecommunication company of Nepal. Using liberalization policy and involving the private sector in a competitive environment for the development and expansion of telecommunication sector in Nepal, then His Majesty's Government of Nepal's decision dated December 25, 1995 had initiated the involvement of the private sector in the development of the telecommunication services. Then, United Telecom Limited started providing services in 2003. NTC was converted into a Public Limited Company on April 14, 2004. Nepal Telecommunications Authority as an autonomous regulatory body has been established on March 4, 1998 as stipulated within the framework of the Telecommunication Act 1997 A.D. and Telecommunication Regulation 1997 A.D. Spice Nepal Private Ltd., popularly known under its brand name "Mero Mobile", is the first private GSM mobile operator in Nepal. The company was established in 2004.

BUSINESS MODEL OF TELECOMMUNICATION INDUSTRY

A business model describes how the enterprise produces, delivers, and sells a product or service, showing how the enterprise delivers value to customers and how it creates wealth. Telecommunication industry consists of different businesses and hence various distinct models. For this project we have analyzed cellular mobile service. In Nepal, basically there are two types of the services viz. GSM and CDMA. The business models used for both the services are in two forms; post paid and pre-paid. These services are available only physically from the telecommunication firms after filling up required forms and paying pre allocated fees. Telecom generates revenue both from the sales of SIM/ RUIM cards and through the call charges made by the use of cellular services. Post paid services require the payments to be made on monthly basis while the prepaid service requires the charges to be made in prior through recharge cards. These recharge cards are made available by the corresponding telecom company at local retail outlets.

IT ENABLED BUSINESS MODEL:

As mentioned earlier, the business models used for the cellular service is only in the physically forms. There is no distinct application of IT in providing the pre and post paid services. But extensive use of web based application for providing value added services are enabled for both the models. However the recharge services for prepaid model use IT application for the recharge process itself as well as for recharging through internet and Automated Teller Machines (ATMs). The firms in the telecommunication industry are competing through providing various web bases services such as MMS, PBRT, Websms, SMS2Email, GPRS as VAS and other subsidiary services like Miss call notification, Wake up call notification. These companies claim that these internet application are providing competitive edge by attracting customers and distinguishing it from the rivals. The profile and the IT enable businesses of three firms in the telecommunication industry of Nepal is presented below.

NEPAL TELECOM (NT)

Profile: Registered as Nepal Doorsanchar Company Limited on 2060-10-22 BS under the Company Act 2053.

The central office: Bhadrakali, Kathamndu;

Branches and Exchanges: extended in 184 locations within the country. The company, Employees: 55, 000

Customer base: 750,000

Core businesses: PSTN – 520,261 lines and GSM Mobile phones- 1219,094 lines as on Mangsir 2064 which covers 95.7% of the total telephone subscribers of Nepal.

In these 30 years of operations, Nepal Telecom has undergone number of changes in technology along with the continuous development and the globalization. The privatization has brought significant changes in business logic but the business models still remains