Nepal Telecom is set to implement a 'subscription model' in its mobile services. The telecom has decided to implement it after the Ministry of Communications and Information Technology included the 'subscription model' in its 10-point reform action plan.  

If the 'subscription model' is implemented, customers will be able to choose whether to activate or deactivate the package they have taken as per their needs. Also, there is no hassle of taking the package repeatedly. Private sector service provider Ncell had already expressed the need for a 'subscription model' last year. At that time, the regulator Nepal Telecommunication Authority had responded that this model was not 'suitable for the soil'. 

Point 4 of the action plan made public by the Ministry of Communications on Chaitra 23 states, ‘In collaboration with the Nepal Telecommunication Authority, mobile data services will be improved by sending notifications to customers after 90 percent data usage, giving customers the option to deactivate Pay-As-You-Go (PAYG), and implementing a system that allows mobile data services to be operated on a subscription model.’ Immediately after this, Nepal Telecom issued a press release for the option to deactivate the PAYG system and package-based services. 

After the implementation of the ‘subscription model’, customers will be able to activate or deactivate the subscription service as needed, said Nepal Telecom spokesperson Rabindra Manandhar. According to him, the company has currently introduced a prepaid combo package that lasts for 30 days for Rs 299 and more such services will be expanded in the coming days.

Ncell, on the other hand, has stated that this model is necessary to ensure the company’s income and invest in new technologies like 5G. Although Ncell had proposed such a model earlier, it did not receive a positive response from the regulator. However, it is pleasant that the government is now prioritizing it, said a representative of Ncell.

‘This model is essential for the long-term survival and development of the telecom industry, and is also convenient and beneficial for customers,’ the representative said, ‘Compared to the current package or pay-as-you-go (PAYG) model, voice packs in the subscription model are about 7 times cheaper, data packs are 80 times cheaper, and combo packs are up to 2 times cheaper.’ 

In the ‘subscription model’, after the customer subscribes to the pack that suits him, there is no need to keep buying the pack ‘manually’ every month and the pack is automatically renewed, service providers say. However, for that, the balance on the mobile must be sufficient. 

While service providers are saying that they will implement this model, the regulatory Telecommunications Authority has informed that it will give approval only after studying its modality and tariff rate. ‘As per the plan of the Ministry of Communications, the NEA will definitely cooperate in this and will study the new modalities and tariff rates brought by the operators and give approval,’ said NEA spokesperson Min Prasad Aryal. 

Telecommunications expert Ananda Raj Khanal points out that the subscription model is not suitable for everyone. According to him, the subscription model that sets a fixed monthly fee may impose a financial burden on customers with low incomes and those who can afford to recharge only a few times. 

‘This model is like a postpaid service, where the customer has to pay a fixed monthly fee (rental) whether they use the service or not,’ he said. ‘This makes the business of telecom companies predictable, but it may be unfair for low-income customers. If a minimum subscription of 150 or 200 rupees is made mandatory for many people who do not spend even 50 rupees a month and use the SIM only to make calls, they will face a huge financial burden.’ 

Instead of implementing a ‘subscription model’ by putting all customers in one basket, expert Khanal suggests that it would be appropriate to implement this model only for those who spend more than a certain limit based on the user’s spending details available with the service providers. He is of the opinion that sending a notification after 90 percent of the data is exhausted and being able to get information about service options through USSD codes will also be cumbersome for the users. 

‘If we really want the interests of the customers, the system of paying as you go system by default should be stopped,’ Khanal said, ‘Only when the customer’s package is exhausted 100 percent and he tries to use the data, then the package is over, it is appropriate to give him a clear notice whether to go to pay as you go or take a new package.’ He pointed out that the current practice of deducting money from the main balance without informing the customer after the package is exhausted has confused the customers.

However, the service providers claim that the ‘subscription model’ is essential for the long-term survival and development of the telecom industry. They argue that this model will ensure income for companies and help them invest in new technologies like 5G and make the market predictable. 

They complain that the continuous decline in the income of telecom companies in recent years has added to the financial challenge. According to the MIS report of the Telecommunication Authority of Nepal (FANL), Nepal Telecom has 16 million 67 thousand 720 and Ncell has 14 million 27 thousand 895 voice service customers. Nepal Telecom has 15 million 234 thousand 171 and Ncell has 12 million 21 million 34 thousand 122 users on mobile broadband. 

Pay-as-you-go (PAYG)
These are different tariff systems for all telecom services. In PAYG, the customer uses the service directly from his mobile's 'main balance' without purchasing any package. The balance is deducted in the same amount as the voice, data or SMS used. It is more expensive than the package. Sometimes, when a customer's package is exhausted, money is deducted from the 'main balance' without their knowledge, which is a nuisance to the customer. Nepal Telecom has given the customer the option to activate or deactivate this service. 

package 
package or combo pack includes all the features of voice, data and SMS. For example, when you take Nepal Telecom's 'combo pack' of Rs 299, you get 300 minutes of call, 4 GB data and 20 SMS. This service is available for a fixed period (28 days). After the package is exhausted, the customer has to purchase it again manually.