Internet service providers say data charges will go up from next fiscal

Kathmandu , June 5th 2019

Amid a flurry of price increases following the announcement of the budget statement last week, internet service providers warned that data charges would go up sharply from the next fiscal year.

They said that the government’s decision to continue levying a 13 percent telecom service charge introduced in the last fiscal year had forced them to pass on the extra cost to their consumers.

Come July 17, internet customers will be paying 20 percent more for broadband connectivity. The new tariff means that the average monthly cost of an internet connection will jump from Rs1,400 to Rs1,680.

“Last year, we had adjusted the telecom service charge in our operating costs at the government’s request,” said Bhoj Raj Bhatta, president of the Internet Service Providers’ Association. “The adjustment and the government’s inability to fulfil the terms of the agreement resulted in a heavy loss of revenue to internet service providers.”

Following a public outcry against the decision to increase the telecom service charge last July, the government made an agreement with internet service providers under which they would adjusted the increased fees in their cost without increasing the price for consumers.

“But the continuation of the service charge in the next fiscal has put us in a difficult financial position, and we have no alternative but to raise internet charges,” said Bhatta. “We internet service providers must not be blamed for the rise in prices, but the government.”

The new tariff also means a reversal of the government’s plan to bring down internet charges to 5 percent of

the average income per capita as stated in the Broadband Policy 2015. The policy had targeted to reduce internet charges to 5 percent of the per capita income by 2018, but the objective has not been fulfilled.

General consumers are upset over the planned hike in internet charges. “At a time when everything is getting costlier by the day, the increase in internet prices is not going to benefit us,” said Raju Dhakal. “The internet should be treated as a basic utility like electricity and water, not a luxury good. The government should address the issue as soon as possible to keep prices stable.”

Last July, the Ministry of Communication and Information had agreed to revise some provisions in the Nepal Telecom Authority regulations in favour of internet service providers if they would adjust the 13 percent service charge in their costs, but no such revision has been made. 

According to Bhatta, the government had agreed not to levy extra charges on sales of supporting equipment such as routers and use of utility poles to relieve internet service providers of additional cost burdens. “But the government has not kept up its side of the bargain,” he said.

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