Image: Claus Hetting
Nepal’s internet market has sprinted ahead in bandwidth but stumbled in balance sheets. For four years providers have competed to deliver ever faster megabits per second, turning fibre cables into marketing billboards. Consumers enjoyed the acceleration. Investors did not (as we explain).
Some 62 internet service providers (ISPs) now fight for a finite number of subscribers. The frenzy began in 2021 when CG Net, a subsidiary of the Chaudhary Group, launched 120 Mbps plans at a rock-bottom price. Rivals scrambled to keep pace. WorldLink, the biggest provider, unveiled packages six times faster. Speeds rose but profits sagged.
The underlying arithmetic is bleak. Average revenue per user fell from more than NPR 980 in the fiscal year 2023-24 to under NPR 900 in the first nine months of the last fiscal year. Growth in subscribers is flattening; half the country is still offline, but most of those households cannot afford fixed broadband. Prices are high by international standards. The International Telecommunication Union recommends the internet cost no more than 2% of average income. In Nepal it is closer to 2.6%. Geography, limited scale as well as dependence on international transit make delivery expensive. A megabit in Kathmandu costs more than a megabit in Mumbai.
As price wars replace speed wars, the weakest providers will vanish. Scale economies favour giants. Smaller firms must either merge or sell out or retreat into niches. Regulators have tried to help by mandating infrastructure sharing, but the gains may cushion margins rather than cut tariffs.
Consumers will benefit briefly. Prices will fall, at least in the Kathmandu Valley. But as capital shifts from promotion to upkeep, service quality may wobble. Faster internet is welcome. Reliable internet is essential.
The firms that survive will be those that can provide more than bandwidth. Bundled content, cloud services plus enterprise solutions will separate the durable from the doomed. Bandwidth delivered market share. Profitability will belong to those who can convert cables into something more.
The digital race began with speed. It will end with survival. ■
