Ncell: Empowering Nepal to Go Digital

Ncell, the first private mobile service provider in Nepal since 2004, has played a significant role in bridging the country’s connectivity gaps. However, it now faces the challenging task of accelerating digitalization in Nepal, where 4G capacity is still not fully utilized. “We, as enablers and infrastructure providers, have a responsibility to support mass consumers and various sectors towards this digital future,” says Jabbor Kayumov, CEO & Managing Director of Ncell. He discusses the challenges confronting Nepal’s telecom sector, emphasizes the importance of all stakeholders working effectively to shape a digital future, and shares Ncell’s plans to addresss customers’ digital needs.

As a landlocked country, Nepal faces challenges in developing its telecom infrastructure. What are your thoughts on the country’s evolving telecom landscape and its potential for growth?

Being landlocked is a challenge, but it can also be seen as an opportunity with two of the fastest growing large economies of the world beside us, connected by the information super highway. Recognizing the vast potential of this country, we embarked on a journey to bridge Nepal’s connectivity gaps as the first private sector GSM mobile operator in the country nearly two decades ago. Since then, the telecommunications sector has witnessed a paradigm shift, and our partners, like ZTE, have been supportive in this journey.

Topographical diversity was indeed a significant challenge when we had to reach far-flung areas to serve our customers. There were many instances where we had to have heavy tower equipment hand carried or use donkeys and yaks, and even airlift materials to install towers. Due to the lack of road accessibility, such requirements significantly increased the cost of infrastructure development. Additionally, the need for permissions from multiple agencies for setting up a tower and community issues added to the challenges.

Our journey in Nepal has been quite a feat nevertheless. Today, Ncell stands as a proud service provider connecting over 13 million customers nationwide, ensuring access to basic telecommunication services, as well as modern high-speed 4G connectivity to over 92 percent of the country’s population.

Despite the nationwide expansion of 4G, Nepali consumers are not fully utilizing the country’s 4G capacity, however. This presents both a challenge and an opportunity to fuel digitalization so that more and more people tap into the 4G opportunity and consume more data to go digital. The future is digital, and we also need to transform from a telco to a tech-co. We have started working towards this goal.

How do you envision Ncell advancing under your leadership, and what challenges are you currently facing?

There is no option but to go digital, and I am sure that is also why the government of Nepal has embarked on its Digital Nepal Framework. Yet the pace of digitalization is relatively slow here, and we, as enablers and infrastructure providers, have a responsibility to support mass consumers and various sectors towards this digital future. From  2G to 3G to 4G, the market is now moving towards 5G. Yet with 4G still underutilized and telecom operators going through a tough phase, the question arises: are we ready for 5G? Industry data shows the telecom sector’s revenue has declined by more than 25 percent in the last seven years. Despite some growth in data consumption, the revenue increment from data is nominal and does not compensate for the decline resulting from a fall in voice and ILD revenue. Our average monthly data consumption per customer per month stood at 177 MB in 2017, which has now increased to over 4 GB. Yet, if you look at income from data, it has only increased by NPR 1 billion in six years to Rs. 12 billion. People are more attached to using OTT services using WiFi or mobile data, which has been hitting both operators—Ncell and Nepal Telecom—hard.

If we envision a 5G future in Nepal, it needs be commercially viable, and this will only happen when customers use more data, there are more digital services, and an improved ICT ecosystem. 5G is about enterprise, business, Internet of Things, and machine-to-machine communication where everything is connected. They might have physical SIM cards or e-SIM solutions, and all these machines have to be connected through operators like us. Such solutions might come from Ncell or other third-party service providers. In order to create a market for connected devices, 5G, or a digital future, all stakeholders—government, service providers, customers, and other components of the ecosystem—have to work effectively to create value for each other.

For example, the government has to come up with favorable policies on spectrum allocation, service taxation, renewal of licenses and fees, equal level playing field, and service expansion, encouraging operators to invest and contribute to digital development.

If these issues remain unaddressed, it will be difficult for telecom operators to sustain in the market. There is also a big gap in content in the market. When we talk about digitalization, there needs to be maximum use of content and applications in diverse sectors such as public service delivery, education, health, and agriculture to name a few, which ultimately contribute to digital evolution.

What key efforts are you implementing to tackle challenges and reinforce your position in the country?

Our market has changed significantly, and so has our focus on data services. The majority of our CAPEX goes to data services, yet the reality of the returns I have already shared. Ncell has become a big brand and our consumers have expectations from us. We are always committed to addressing the demands of our customers, who made Ncell what we are today. Being a Nepali company, it is our responsibility to serve Nepal and Nepalis, and we are aligned with the theme ‘Here for You’. It means we are here to listen and provide solutions that consumers need. We plan to come up with solutions that lead our customers to go digital and set a pathway for 5G and beyond.

At Ncell, we have more than 98% Nepali colleagues equipped with good knowledge, enabling Ncell to be a world-class service provider. We have a vision to make Ncell a complete digital technology company, and from the capability, knowledge, and technical expertise perspectives, we are well-equipped to do the best for the country.  We also now have support from our strategic partner—e& international. We are poised with a strong commitment and capability to diversify our digital services, enriching the lives of Nepali people across the country. The imperative for ongoing expansion of network infrastructure, beyond mobile connectivity, further underscores the significant opportunities that lie ahead for the country.

What’s your strategy going forward?

There are markets like our neighboring countries Sri Lanka and Bangladesh, which are doing very well in terms of revenue. The telecommunications industry has devalued itself from the value-add perspective. Today, a lunch set of a Thakali meal costs more than the monthly phone bill. Here, consumers can simply compare the value added. My point is that the value that our connectivity gives is actually significant, but there is still a perception that it is expensive. What is more important is that we have never increased the price of our services no matter what the inflation rate is and how much we have invested to make our network available nationwide.

As a service provider, we need to survive and continue bringing the latest technologies and the best quality of service. Today, the growth will come from non-traditional solutions that address consumer needs in multiple areas like education, health, public service delivery, and entertainment, etc., through the use of the internet. For this evolution, service providers like Ncell are going to be key for future growth. The role of the government, or say the regulator, is also very critical because it is the responsibility of the regulator to make sure that industries and companies like us will have the returns to ensure continued investments in the latest technologies as this industry is very capital-intensive.

With many markets around the world already embarking on their journey to 5G, there is also an expectation that Ncell will introduce 5G in the Nepali market. Yet,  to bring this new technology, operators need to make a huge investment. At a time when the telecommunications industry is already facing problems of continuous revenue decline, the regulator needs to ensure that the cost of the spectrum or licenses is set ensuring that service providers earn profits and in return, the companies will continue to invest in new technologies. Telecommunications is a sector where you need to build, maintain and keep reinvesting to introduce newer technologies.

Collaboration is key to success in the telecom industry. How do you collaborate with your partners to drive growth and innovation? Having cooperated with ZTE in wireless network projects, how do you evaluate ZTE’s competence in project delivery and provision of high-quality products and services?

The telecommunications sector has always been a driver, or you could say an enabler, for every other sector. With changes in technologies, in which it rides and shifts towards broadband and beyond, many things have changed in the last decade. Many things we do are paperless today; even many services are now being provided electronically, and after the COVID-19 pandemic, consumer behavior has shifted more towards data. Following the launch of 4G, the cost of mobile broadband has come down drastically, contributing to the economy and encouraging consumers to gradually go digital. These days, we see almost all businesses using scan codes for digital transactions. We are happy to be a major contributor to this evolution that is taking place. There still lies huge potential in the digital sphere when it comes to solutions that make the daily lives of general consumers and the performance of businesses better and more productive.

Where we stand today is a result of industry collaboration. As our market is still behind other economies in terms of digitalization and reaping benefits from it, there are more things that we can do to diversify the use of data. For that, we need the support of the government, and content creators need to work on applications that best suit the Nepali market and help consumers adopt a digital life. What I find here is that our market has low digital literacy, which results in lower usage of applications and data consumption. Our focus is to drive data, change consumer lives, and contribute to the economy's digitalization. For that, all stakeholders, including partners like ZTE, have a big role to play.

In our journey, we have collaborated with ZTE for a long time on multiple wireless network projects, including radio/baseband, core network, transport network service, and network operation and maintenance. We believe that ZTE will focus more on updating available technical solutions which bring simplicity and efficiency in managing operations. Also, we are pretty confident that together with ZTE’s technologies and solutions, we will continue to create good value for our customers and the country while moving ahead with the digital development of the country.