Bishakha Lakshmi Khadka is the Corporate Communications and CSR Head at Ncell, the largest telecommunications service provider in Nepal in terms of revenue and market share, and the second largest by subscriber base. Ncell has set new benchmarks in the telecommunications industry, enhancing the consumer experience in Nepal. As a multinational company, Ncell has contributed significantly to the country’s economy by transferring technical expertise, management practices and driving economic growth. Ncell’s contribution to Nepal’s Gross Domestic Product stands at 2%.
HRM Nepal recently caught up with Khadka to discuss various issues related to the telecommunications sector. A seasoned communications professional, Khadka has proven herself to be a versatile communicator with innovative approaches. She holds a Master’s degree in Mass Communication and Media Studies from the University of Punjab. Excerpts:
Q: How would you analyse the current situation of Nepal’s telecommunication sector in general and Ncell in particular?
A: It’s truly wonderful to see how easily people now access telecommunications services and stay connected with the world through the internet, becoming increasingly digitised. Today, we can do virtually anything with a mobile or smartphone – whether it’s managing money, banking, working or more. From a development perspective, the telecommunications sector stands as one of the major achievements resulting from the government’s liberalisation policy in the 1990s and the entry of the private sector in 2004. Telecommunications is interconnected with nearly every other sector.
We all recognise how Ncell’s entry into the telecommunications market has driven competition, making services more accessible and affordable. Our services now span the entire nation. Basic mobile service coverage has been expanded to ensure access for over 92% of the population, while modern 4G service has reached 90% of the population, providing countless consumers with the opportunity to connect and benefit from high-speed mobile broadband. With basic connectivity now available almost everywhere, service providers are increasingly focusing on data and beyond.
Q: Ncell, a private telecommunications service provider, is recognized for introducing competitive and high-quality services and expanding coverage to rural and remote areas. How would you like to remember Ncell’s journey in Nepal?
A: After nearly two decades in Nepal, we are proud to be a cornerstone of national development, representing the private sector and foreign direct investment.
This month marks our 19th anniversary. Within a few years, our services became widely accessible and we gained a reputation as a youth-oriented brand. While we serve people from all walks of life, Ncell remains synonymous with youth culture. This positioning holds significant market and industry value. Ncell demonstrated that mobile phones are not luxuries but essential services that every Nepali should have access to. Within five years, we introduced 3G service to the masses, including the Everest region. This marked a turning point as people began to understand the power of mobile broadband connectivity.
Today, our 4G service reaches 90% of the population, an impressive coverage given Nepal’s challenging terrain. This widespread network, from urban centres to remote villages, offers immense potential for digital transformation. Our service licence has been extended by five years and we are now focused on becoming the most beloved and valuable brand in Nepal.
Q: As the leading market player in Nepal, Ncell significantly contributes to government revenue and actively engages in corporate social responsibility initiatives. How has the company leveraged these strengths to promote its brand as a responsible corporate citizen?
A: I am happy to know that you are well aware of our contributions to the country and the communities where we operate. We have been continuously supporting public financing through various tax contributions. Ncell is one of the largest taxpayers, a fact that has been acknowledged multiple times by the government. Our tax contributions to the government have exceeded Rs 320 billion since our inception, with Rs 20.3 billion contributed in the last fiscal year alone.
In recent years, tax contributions from both Ncell and Nepal Telecom have been declining due to increased data usage and a fall in revenue impacted by the massive use of over-the-top (OTT) applications such as WhatsApp, Viber and Messenger. Voice services, our main revenue driver, have seen a decline in their contribution to total revenue since 2017. For example, in the fiscal year 2019/20, we paid Rs 32.62 billion in taxes to the government, which accounted for 3.2% of the government’s total tax revenue.
As a result of this revenue decline, our annual CSR spending has also decreased. However, I am proud to share that Ncell is the only company in Nepal that prioritises CSR and sustainability, seeking impactful and visible results in areas defined by the CSR law. This effort directly and indirectly supports the government in achieving the Sustainable Development Goals (SDGs). To date, we have contributed nearly Rs 2 billion to social initiatives in various areas, primarily focusing on important sectors such as education, health and the environment.
As a socially responsible company and a corporate citizen that interacts with the daily lives of the general public, we need to understand ground-level needs and the government’s development focus. Without developing communities, we cannot aspire to national development. We conduct an annual CSR survey, which indicates that a significant number of people are aware of our efforts to give back to society.
Q: Ncell has a diverse customer base. How effectively are you conveying product information, usage instructions and benefits, considering the varying capacities of users to understand the information provided?
A: At Ncell, we always prioritise our customers. Every product or service we launch is based on thorough market research conducted by a dedicated team. We offer various services to meet our customers’ communication needs. For instance, we provide Sadhain ON for general customers, allowing them to choose different packs based on their requirements and benefit from bundled services of data, voice, and SMS. Similarly, we offer Biz Sadhain ON for enterprises.
Our research revealed that customers experienced balance deductions for data without their knowledge. We also noted an increasing demand for data and affordability issues among customers. To address these concerns, we introduced packs that prevent bill shocks or balance deductions, offering more data volume at a lower price.
Regarding your question, we cater to various customer segments and disseminate information through different channels accordingly. For example, to target youth, we use social media; for homemakers, we might choose TV; and for rural areas, radio is often the best medium. Effective communication is crucial for our business, so we utilise traditional media, digital media, social media, call centres, Ncell Centres and points of sale across the country.
Q: The company has established Ncell Centres in various locations to provide better service to its users. How effective are these centres?
A: As more customers embrace digital solutions, they interact with our chatbot and resolve their issues online. However, physical presence remains crucial in enhancing the overall customer experience. As an essential utility service provider, we need to maintain face-to-face interactions with our customers, understand their needs and continuously evolve. We have 33 Ncell Centres across the country, which have been instrumental in understanding ground realities and gathering customer feedback.
We are committed to reaching and serving customers conveniently. Ncell Centres provide comprehensive customer services directly to the local community from a single touchpoint, making them highly effective. These centres handle general inquiries, SIM subscriptions, internet settings, SIM card changes, CUG number modifications and many other services. While we have digitised many services, these centres remain an integral part of our customer service and business operations, offering a human touch.
Q: Data has become the main source of revenue for telecommunication companies. Which data related products launched by Ncell do you think have been the most effective?
A: Mobile data has become one of the primary sources of revenue generation after voice, which is continuously declining for multiple reasons, including the increased use of OTT services and a drop in revenue from long international calls (ILD). We have observed that while the demand for data is increasing significantly in Nepal, the revenue operators earn from data does not compensate for the income decline from voice, the main revenue driver.
The average data consumption per customer per month was around 1GB in 2019, and this has now increased to 4.5GB. Simultaneously, after the launch of 4G in the market, the charges that customers pay for data have decreased significantly. For example, our Sadhain ON pack and Biz Sadhain ON plans aim to empower customers to always keep their data on without fearing that their balance will be ‘khatam’. These packs offer more data volume at a more affordable rate and include free data for social media use, such as Facebook, Instagram and YouTube.
We know that customer demand is growing as they continue to go digital after the COVID-19 pandemic. The idea of Sadhain ON is to change Nepali customers’ data usage behaviour, aligning it with global trends and preparing the market for 5G. Despite our massive expansion of the 4G network, this technology has not been fully utilised, resulting in lower average data consumption by customers compared to neighbouring countries.
Q: Telecommunications companies have been observing a rapidly evolving landscape in terms of the services they offer. How do you relate this scenario to product development?
A: Our Sadhain ON is a response to the evolving market scenario. There is no doubt that data represents the future market, and service providers have been increasingly focusing on data. In line with the changing landscape in the telecommunications sector, our focus has shifted towards transforming from a telco to a tech co – a digital technology company that not only provides data, voice and SMS but also addresses market demand with innovative digital solutions. The sector has witnessed a revenue decline of over Rs 25 billion in the last 6-7 years due to these changes. If telecom companies like ours do not evolve into modern, converged players and if the government does not support us with favourable policies, this sector will collapse.
Q: What challenges do you foresee in the telecommunications business in Nepal?
A: The telecommunications field is highly technical and rapidly evolving. As mentioned, we must adapt to these changes. Both Ncell and Nepal Telecom have experienced revenue declines. In 2018, annual turnover was Rs 100 billion, but it has now fallen below Rs 75 billion, making the industry increasingly financially challenging. Over the past six years, telecommunications sector revenue has decreased by 26%, and profit by 81%. If this trend continues, negative profitability is expected within two years. This situation could hinder future investments in new technologies like 5G, negatively impacting ICT development, consumers and the country.
I believe the government should support operators through relevant frameworks and policies during this transition and ensure a level playing field for Ncell. A struggling sector will hinder Nepal’s digital aspirations. Leadership and government bodies are crucial drivers of the ICT ecosystem. They must facilitate faster implementation and adoption of new technologies and ensure that regulations align with international standards. Government support is essential for transitioning from telco to techco and building sustainable digital service/solutions businesses, which are the future.
Modernising the existing policy and licensing framework is urgently needed. To encourage continuous investment, the government must create a predictable and sustainable business environment. A flexible and investment-friendly licensing framework for multinational companies like Ncell is crucial. However, Ncell has consistently faced an uneven playing field.
Despite these challenges, telecom companies are burdened by high licence renewal costs. The pricing of telecommunications licences and frequencies must be reevaluated to reflect the current market conditions.
Q: How is Ncell helping to bridge the digital divide?
A: The telecommunications sector is a key driver of digital development. With a widespread network providing high-speed 4G mobile broadband, people have the power of digital technology at their fingertips.
As a vital part of Nepal’s ICT ecosystem, Ncell has been instrumental in bridging the digital divide through expanded rural network coverage, nationwide 4G service, affordable mobile data and initiatives like modern IT labs in schools (under CSR) and digital literacy campaigns with the government.
Ncell is one of Nepal’s largest foreign investments. Initially owned by TeliaSonera and then Axiata, it’s now primarily owned by a Nepali-origin foreign investor. Without foreign investment, Ncell and its contributions to Nepal would not have been possible. The development of the telecom sector is a result of free-market policies and foreign direct investment (FDI). FDI is essential for any market. Investors must be treated fairly and ensured a return on their investment through friendly policies. Such investments contribute to socio-economic development and job creation.
As one of Nepal’s two primary telecom providers, we’re proud to have played a major role in realising the Digital Nepal vision. Ncell has been instrumental in making mobile phones an essential part of daily life in the past two decades. Our contribution to Nepal’s GDP is a significant 2%.
Q: What innovative and unique products can consumers expect from Ncell in the near future?
A: We continually evolve to align with international trends and market/consumer needs. We remain committed to offering products, services and digital solutions that best serve our customers and support Nepal’s digitalisation journey. Ncell is proud to have played a significant role in what many development agencies describe as Nepal’s leapfrogging progress in the past two decades, encompassing agriculture, e-commerce, telemedicine, internet banking and information technology.
5G technology is inevitable and will revolutionise how businesses and economies operate. Over 60 countries worldwide already have 5G. Following India, we aim for Nepal to be the first South Asian country to introduce 5G commercially. 5G isn’t just about faster internet; it enables cutting-edge technology with significant development potential, from agriculture to health, education to mobility, and even tourism, aligning with the government’s ICT vision.
Nepal currently ranks 109th in mobile broadband speed. By 2026, we aim to be in the top 50. Achieving this requires a crucial first step: every Nepali must start using their mobile phones productively, which means keeping data ‘Always ON’ or ‘Sadhain ON’. Sadhain ON is one of our most innovative products and we will continue to be a pioneer in introducing innovative products, services and solutions to the market.
