Background to Ncell and telecommunicatons in Nepal

Since 1995 the telecom sector has undergone significant growth in Nepal. The decision of His Majesty's Government of Nepal on December 25, 1995 paved the way for the involvement of the private sector in the development of the telecommunication services.

Ncell (then Mero Mobile) broke the monopoly held by the state-owned Nepal Telecom, by building a new arena in mobile telephony services. Ncell has adopted the approach that mobile communication is not a luxury but a necessity. Ncell was the first in the market to launch a single rate tariff for all everywhere in Nepal. Ncell was also the first to introduce the Nepalese to a bundled offer (handset + tariff), and the latest smartphone solutions.

By mid-2012, Ncell developed into the 4th largest tax payer and the number one foreign investor in Nepal. By bringing not only the latest technologies, but also the most modern business processes and knowledge, we help develop Nepal’s business environment, infrastructure and economy

Ncell in brief

In March 2010, Mero Mobile rebranded to Ncell, followed  by the change of the legal entity name from Spice Nepal to Ncell.

Spice Nepal Private Ltd. was established in 2004 as the first private mobile operator in Nepal and launched its services under Mero Mobile brand in 2005. In October 2008, TeliaSonera acquired controlling interest in the company.

Since its acquisition by TeliaSonera, Ncell has actively been developing its 2G network. Coverage has increased from 40% to 90% of the population. Since 2010, Ncell has had the best mobile network quality in Nepal confirmed by third party surveys and tests. 3G services were launched in late 2010.

Currently, Ncell is the number one GSM operator in Nepal with over 8 million subscriptions (of which nearly 100% are prepaid) and around USD 300 million in annual net sales. Ncell’s revenues have been nearly doubling on an annual basis.

Ncell is committed to continue investing in the future development of the telecommunication infrastructure and services in Nepal and to contribute to the future prosperity of the country and its citizens.

The population of Nepal, of which four in five people live in rural areas, may previously never have had access to telecommunication services, will inevitably gain from increased possibilities to communicate and access information. One mobile call may save a day of travelling by foot in mountainous areas.

According to a research, every 10 percent increase in mobile penetration in a developing country drives about 1.2 percent increase in GDP growth. When Ncell was established in 2004, mobile penetration in Nepal was under 10 percent. At the time of the acquisition by TeliaSonera, it had grown to about 40 percent of the population. Currently, it is more than 60 percent.

Ncell has extended its network to cover all the 75 administrative districts and about 90 percent of Nepal’s population - a major leap in the country’s telecommunication industry.

TeliaSonera has invested close to half a billion USD in Ncell since acquisition in 2008 and until mid-2012.

Mobile communication industry in Nepal is still in its infancy. TeliaSonera is awawre of the significant role it plays as well as the responsibility it has taken on in Nepal. Therefore it is committed to driving long-term sustainable development in the country.

Telecom industry in Nepal

In 1999, tele-density was one line per 100 inhabitants. The Telecommunication Act of 1997 established a regulatory body, the Nepal Telecommunications Authority (NTA) on March 4, 1998. Government of Nepalpassed the Telecom Policy, 2004 replacing the older Telecom Policy, 1999.

Until 2003, the state-owned Nepal Telecommunication Corporation (NTC) was the only telecommunication company in Nepal.Spice Nepal Private Ltd., now Ncell, was the first private GSM mobile operator, established in 2004.

In 2000, having a mobile phone was a symbol of status. Not only was the down payment for the phone high for Nepali people, but they also incurred steep costs for making and receiving calls. At that time, the handsets we use today cost Rs.50,000 (USD 7,000), as opposed to Rs. 3,000 (USD 400).

Ncell contribution to Nepal

Creating jobs for a job-hungry country

The poorest segments of the Nepalese population every year migrate to different parts of the world in pursuit of a dream of a better life abroad. Many of them find themselves consigned into slavery and appalling work conditions. In 2011, about 400,000 young Nepalese left the country mainly for the Middle East, in search of work.

Ncell is now directly providing jobs for over 1,500 persons and creating job opportunities for tens of thousands of people around the country through its sales channel, sites construction etc.

 Bhola of Lakhanpur-1 Ramechap has been using the mobile phone since 2010. Four years ago he started working as a porter in Kathmandu, the capital city. His income has increased three times because of the mobile phone, compared to the years when he had no phone. Once he leaves to carry the load, he leaves his phone number for the next time.

When he had no mobile phone, he had to go hunting for work asking every single shop in the city. Now he can easily go back to his village to meet his family, because the wholesaler calls him when they have load for him to carry, so he doesn’t fear losing the work and now he is earning Rs. 20,000 (about USD 300) per month thanks to his phone. He proudly says he has bought a land back home and even built a house for the family (source: Kantipur Daily, Jan 5, 2012 article by Makar Shrestha).

Women who used to grind stones or rocks manually to produce gravel, now negotiate the rate with the vendor through their mobile phone. They no longer have to wait, and their family no longer has to sit without food, for a vendor to approach them for gravel work. 

Shyam Kumari Chaudhari of Siraha, a house wife from a poor family, became a millionaire thanks to Ncell’s prize draw in 2012. She was the first of the seven owners of lucky SIM-card numbers to win Rs.1 million (about USD 12,000) from Ncell – simply for being an Ncell subscriber. When asked about her plans, she said she was going to call her husband back from work in Qatar, put her two children in a good school, buy a land and pay back the loan with her prize money.

Supporting education in Nepal

Nepal is ranked 15th in the world by illiteracy rate. Over 50% of the population is estimated to be illiterate. Nearly half of the children in Nepal have no access to primary school. There are about 26,000 government schools with over 6 million students, and about 500 colleges with 200,000 students. On average a school has about 5 teachers and 230 students (about 50 students per teacher).

When Ncell launched its first small-scale social projects in 2010, it chose the area of education as a priority one and related to the company’s business. In 2011, Ncell invested some USD 100,000 in “Adopt a school” and “E-library” projects aimed at fostering education for children. These projects involve reconstruction of primary and secondary schools in remote and poor rural areas, providing children with better studying conditions and studying materials, access to electronic libraries and communication through mobile internet.

About 5,500 children in 2011 and over 11,000 children in 2012 have got support from Ncell through these projects which the company is planning to continue also in the future, in co-operation with Save the Children.

A voice against human trafficking

There is strong gender inequality in Nepal. Male children generally get better education (male literacy is twice higher than female one - 65% against 28%) and living conditions. They get all the heritage rights in the family, whereas a girls’ birth often even remains unregistered. Girls are gotten rid of as “financial burden”, sold into slavery by their own parents or husbands. More than 10,000 girls are trafficked every year, according to officially available estimations.

In late 2011, Ncell partnered with Save the Children and the local “Shakti Samuha” NGO to help fight girl and women trafficking. At the initial stage of the project, over 20 girls got financial support from Ncell to master a certain skill and start their own business, so that they can bring money home and avoid being sold.

Ncell for green solutions

Solar power driven base station in HimalayaNepal’s sunny climate and the scarcity of electric power supply, when electricity shortages may reach up to 20 hours a day, make the use of solar energy highly relevant for Nepal. Therefore Ncell has included solar-powered base stations in its network planning from the very beginning. A study ordered by TeliaSonera and conducted by GSMA experts has revealed significant potential for use of solar energy in Ncell’s network.

Ncell takes energy efficiency into account at every new equipment purchase. At the end of 2011, about 3% of Ncell’s 1,800 2G base stations used alternative energy. By the end of 2012, the number of base stations using “green” energy is planned to be increased by 2.5 times.

In 2009-2010 network roll-out Ncell implemented Base Station Controllers (BSC) and Base Stations (BTS) consuming half the power compared to previous generation equipment. In 2011, Ncell moved ahead for the next generation small BTS, the so-called Zero Site solution that consumes only 20% power compared to the existing ones.

Ncell is implementing these green sites in geographically challenging areas. In October 2010, Ncell launched the world’s highest 3G base station at some 5,200 m altitude on Mount Everest. The station works on solar energy and enables mobile voice and data services for the dwellers of the Khumbu valley and the tourists climbing Everest.

Some of Ncell’s other initiatives in the area of higher performance efficiency of the mobile network and eco-friendlier solutions include the following:

 Testing and implementation of eco-friendlier Diesel Generators (DG) supporting Biodiesel and consuming 30% less fuel in comparison to conventional solutions. However, in order to rollout such DGs, there is a need for a Government program including regulation and taxation of bio-diesel import (or local production) and distribution.

  • Testing and implementation of a new type of batteries which have faster recharge cycle and double lifecycle compared to conventional gel type batteries, in order to decrease DG run hours.
  • Piloting of carbon towers, as a part of long-term strategy to use less steel.
  • Pilots of an advance functionality allowing reduction of electromagnetic emission through radiating less power in cells where there is no traffic.
  • Power saving solutions on existing sites, including usage of passive cooling system and minimizing air conditioner (Freon emission) impact.
  • Trial and implementation of thermal management solutions in the network (ventilation and cooling).
  • Active participation in NTA workgroup related to site sharing - a long-term program that envisages additional environment and energy saving.

Alexandra Akkirman