Private sector telecom service provider Ncell has sought permission from the government for the third time to trial 5G technology in Nepal. Ncell has applied to the Nepal Telecommunications Authority (NTA) for 15 MHz in the 700 MHz band and 100 MHz in the 2600 MHz band, both the agencies confirmed.

Ncell had applied for 5G trials for the first time on April 21, 2021, and for the second time on August 31 of the same year. This time, it had sought permission for the third time last week, but the company has stated that it has not received it yet.

Ncell has been saying that it will invest between 200 and 250 million US dollars for 5G trials and other telecommunications technology expansion. ‘We want to stay in Nepal, we also have a great capacity to invest,’ Ncell chief  Michael Foley had said at a conclave organized by Kantipur last January, , ‘The company has no debt on its balance sheet. We are ready to invest 200 to 250 million dollars for the expansion of telecommunications infrastructure here.’

Recently, there have been various uncertainties and criticisms regarding the ownership, infrastructure expansion and future of Ncell’s license. The company, however, has stated that it wants to bring business continuity and modern technology to Nepal. The company has stated that it aims to expand 5G to support concepts such as ‘enhanced mobile broadband’ with speeds of up to 10 Gbps and smart cities and the Internet of Things (IoT).

Pradeep Poudel, spokesperson for the regulatory Telecommunications Authority, confirmed that Ncell has requested a frequency for the 5G trial. According to Poudel, permission has not been granted so far because the existing policy does not provide a clear provision for the authority to grant permission for the 5G trial. ‘This matter falls within the jurisdiction of the Frequency Policy Determination Committee under the Ministry of Communications,’ he said. ‘Following the decision of the committee, the authority is currently proceeding with the frequency auction process.’ Through that, companies will be able to obtain frequencies and conduct trial or commercial operations. However, he mentioned that the process of obtaining frequencies will proceed only after the operator pays all the dues to the government, especially the frequency fee, if any.

The recent meeting of the Frequency Policy Determination Committee, chaired by the Minister of Communications, has fixed the base price of the 3500 MHz band for 5G. The meeting on Chaitra 23 fixed the new base price for various frequency bands. In particular, the base price of the 3300-3700 MHz band used for 5G has been fixed at Rs 4 million per year per GHz. The 3500 MHz band is considered the most suitable 'mid-band' frequency for 5G worldwide. ‘The path for frequency auction has now been cleared as the base price has been fixed,’ said an official from the ministry. ‘The NEA has also moved ahead with the work at a rapid pace after the committee’s decision, so the auction process is moving forward soon.’ The NEA last conducted a frequency auction in December 2076.

NEA officials believe that there is no need to continue the trial in Nepal as 5G technology has already been trialed in other countries and is now mature worldwide. Although Nepal Telecom has already spent about Rs 20 million for the trial, it has not been able to create a concrete blueprint for commercial operation. Due to this, NEA officials point out that it is necessary for service providers and the industry sector to plan how to build a use case rather than trialing 5G technology in different areas of Nepal.

The government had given permission to Nepal Telecom for the 5G trial four and a half years ago. After the Frequency Determination Committee gave Nepal Telecom its in-principle approval to test 5G in Chaitra, 2077, the board meeting of the regulatory Telecommunications Authority decided to grant formal permission to the telecom for the 5G trial in Kartik, 2078. For that, 60 MHz bandwidth was also provided in the 2600 MHz band.

Telecom had stated that it had conducted internal tests in cities like Kathmandu, Pokhara, and Birgunj. However, Nepal Telecom has not yet provided information about the experience, nor has any report been released. According to the permission, the telecom was allowed to conduct the tests for one year and not charge any fees from the customers during this period. However, the customers were not allowed to use 5G. Since then, Telecom has not done anything about it, saying that 5G technology is very expensive, there are few 5G-enabled devices, and there is no use situation.

After Nepal Telecom started the process of acquiring equipment from Huawei and ZTE for 5G testing, countries including the US, India and others raised questions saying that the responsibility was being given to a Chinese company without a bidding competition. Telecom sector observers say that due to this dispute, there have been delays in testing permits and equipment imports in some places.

In South Asia, 5G service is yet to be launched in Nepal. Some argue that Nepal should now move to a new technology as 4G technology will be replaced in the future and 4G handsets will be less in the global market. Others have been saying that it will be enough for Nepal to provide robust 4G in the highest form. 5G requires new towers, antennas and cutting-edge software. They believe that if 4G is removed from ‘congestion’ (network jam) and optical fiber is expanded, most of the current digital needs can be easily met. However, the other side's view that there is no room for delay as future technology is not to be left behind and new startups need Fiji is equally strong.

In the case of Ncell, the company's license period is ending in Bhadra 2086. According to the Telecommunications Act, 2053, after the license period (25 years) of telecommunications companies with more than 50 percent foreign investment, the land, buildings, machines and equipment of those companies should come under the ownership of the Nepal government. Ncell has 80 percent foreign investment. Therefore, there is a legal provision that it should come under government ownership after 2/3 years. There is confusion about whether to stop this or continue operations.

Recently, Ncell wrote a letter to the government proposing to make itself a fully Nepali company and issue an IPO for the general public. Ncell has committed to bringing more than 50 percent of its shares to the ownership of Nepalis. Ncell has always accused the government of discriminating between Nepal Telecom and itself. Ncell argues that Nepal Telecom was given concessions in license renewal fees and interest rates, but it was tightened with interest. The company complains that Nepal Telecom was given permission first in 4G and 5G and placed itself second.