IMAGE: CLAUS HETTING
NEPAL HAS declared an Information Technology Decade, an ambitious goal for a country where digital tools stay the preserve of a fortunate few. In the capital, technology firms export software services at a commendable pace. Outside the Kathmandu Valley, conditions deteriorate. Internet use reaches some 38% of households. Computer ownership is below 20%. For the digital decade to carry weight rather than rhetoric, the government must pair ambition with a set of precise, connected reforms. The task stretches far further than slashing heavy taxes on smartphones.
The first priority is to overhaul a regulatory framework stuck in the 1990s. Nepal’s Telecommunications Act was written for an era of voice calls rather than data. The Nepal Telecommunications Authority lacks real independence with a board appointed by the ministry it oversees. The outcome is a market where two operators dominate mobile broadband and a small group controls fixed lines, curbing competition and innovation. The law needs rewriting for the digital age, granting the regulator autonomy and enforcing rules that compel incumbents to share infrastructure such as towers and fibre. A credible third mobile operator would add pressure, provided the referee can act with authority.
Second, the state should redirect its Rural Telecommunications Development Fund from a slow-moving builder of infrastructure into a driver of demand. The fund, financed by a 2% levy on operators, has progressed cautiously on fibre rollout. Its larger promise sits in closing the “usage gap”, the gulf between network availability and actual take-up. It should support low-cost data plans for remote communities and help finance access to devices. Malaysia’s universal service fund, for example, delivered millions of subsidised smart devices. Hardware affordability determines whether networks attract users or stand idle.
The third reform centres on trust, built through robust digital public infrastructure. A national digital-ID system counts 15m registrations yet stays detached from practical services. Digital signatures, legal since 2006, rarely feature in banking. After earlier data breaches, citizens and firms fall back on cash and paper. Nepal can draw lessons from abroad. India’s “India Stack” links a secure digital identity to a public payments platform, creating a trusted foundation for private innovation. The state’s task is to provide secure, open building blocks and then allow markets to flourish.
Fourth, fiscal policy calls for a strategic rethink. Digital access is treated as a taxable luxury rather than a productive base. A 71% levy on smartphones stands out, alongside a web of sector-specific charges that raise the cost of fixed broadband. The finance ministry must balance immediate revenue against long-term expansion. Lighter taxation promises a wider, more productive formal economy. Programmes that supply refurbished computers to schools, as Canada has done for decades, would strengthen the skills of the next generation.
Those skills define the fifth reform: a national push for digital competence. Nepal ranks 124th out of 134 countries on a global digital-skills index. A mere 9% of adults manage a basic task such as copying and pasting text. Market forces alone will struggle to fix that gap. Digital literacy belongs in the school curriculum from an early age. Vocational institutions should collaborate with technology firms to design courses linked to employment. The aim is a steady flow of talent for domestic firms and greater appeal for high-value outsourcing.
The final reform looks ahead. Trials of 5G networks have begun yet rollout faces big costs and spectrum rules that bar trading. Barriers would fall through shared infrastructure and wider use of public assets for transmitters. The goal is readiness rather than prestige, ensuring that when advanced technologies gain economic importance, Nepal enters the race on time.
Together these six reforms—modern regulation, refocused rural funds, strong digital public infrastructure, sensible taxation, broad-based skills and preparation for advanced networks—form a coherent package. Each supports the rest. Better skills yank up demand for devices and services. Trusted digital identities enable online payments and commerce. Competition lowers prices and widens access.
The opposing path leads to a divided country. A dynamic digital enclave in Kathmandu earns foreign exchange while most citizens and small firms stay excluded from the modern economy. Official data show that a firm with a website achieves productivity gains of 27%. The link between digital adoption and prosperity is tangible. Nepal’s IT Decade will be measured by whether a student in Karnali or a shopkeeper in Madhesh can take full part in the digital economy. That bridge rests on six sturdy pillars. ■
