The Pulse

Digitizing Nepal from Within the Himalayas

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The Pulse

Digitizing Nepal from Within the Himalayas

Kathmandu has ambitions to boost its technological capabilities by leveraging cooperation with various partners.

Digitizing Nepal from Within the Himalayas
Credit: Flickr/ Jan Bockaert

Last month, Nepal launched its first satellite, NepaliSat-1 into the orbit, joining other South Asian countries such as India, Pakistan, Bangladesh and Sri Lanka in owning a national satellite. Previously, Nepal has been relying on the South Asia Satellite, launched by India and offered to other South Asian nations for boosting domestic information and communications technology (ICT) connectivity. Nepal’s own satellite launch took a different turn, however, by not relying on India. Instead, Nepal gathered multilateral assistance from the United Nation’s BIRDS program, in collaboration with Japan’s Kyushu Institute of Technology for the launch.

This episode, Nepal’s breakthrough in international space collaboration, is only a glimpse of Kathmandu’s ambition to boost its overall technological capabilities and independence from India.

Earlier in March 2019, Nepal’s Minister of Communications and Information Technology called for more foreign investment in Nepal’s ICT sector — assuring that Kathmandu has already set in place an ICT Policy (2015), Foreign Investment and Technology Transfer Act (2019) and a new Public-Private Partnership Act (2019) to facilitate such investment. The Nepali government also introduced a Digital Nepal Framework last year that outlined eight sectors and 80 digital initiatives – of which hard infrastructure like a fiber broadband network, 5G and supporting a special economic zone for the IT sector were listed as agenda items for Nepal’s connectivity sector.

Internationally, the World Economic Forum’s Network Readiness Index (NRI) ranked Nepal as the 118th out of its 139 countries of study in 2018, up from a 126th in 2013. Under the NRI’s sub-pillar of readiness, business usage, political, and regulatory environment, Nepal also fared better than they had five years ago. In addition, Nepal stands out among Asia-pacific’s tier-2 ecosystems, where it has doubled the number of active tech hubs, currently 12, between 2016 to 2018, according to a GSMA report. For comparison, Myanmar and Bangladesh have 14 and 15 tech hubs, respectively.

Domestically, demand for IT enabled services in Nepal has grown substantially. According to Nepal Telecommunications Authority, mobile penetration reached 117 percent as of 2017, up from a mere 60 percent in 2012 (the above 100 percent number is possible due to individuals having multiple sim cards and other related issues). As of November 2018, Fitch Solutions Marco Research reported that within a year of the end of 2017, the number of fiber-based broadband subscription have jumped by nearly 60 percent. Three major mobile operators (NDCL, NCell, and STPL) also kickstarted 4G services in the country between 2017 and 2018. Prior to 2017, over 90 percent of Nepal’s mobile subscription relied on 2G services.

These positive developments have been well supported by a number of international partners as Nepali telecommunication companies look outward for collaboration. JIn January 2018, China Telecom Global joined hands with Nepal Telecom to launch internet services, after having laid more than 80 kilometers of optical fiber cables between Jilongzhen (China) and Rasuwagadi (Nepal) outside of Kathmandu. WorldLink, one of Nepal’s largest internet service providers also announced plans to upgrade its bandwidth capacity. In doing so, WorldLink partnered with Finland’s Nokia to upgrade 650 kilometers of backbone network, stretching from Kathmandu to Birgunj to the south and Siddhathanagar, to the west of the capital. Previously, Nepal relied mainly on Indian telecom companies to provide Internet access for its citizens.

As the Digital Nepal program estimates to deliver an impact worth 800 million Nepalese rupees ($7.23 million) by 2022, already its IT-enabled services and business process outsourcing sector has been liberalized to allow 100 percent foreign direct investments, while the telecommunication sector allows 80 percent FDI. But Nepal’s ICT infrastructure still remains a work-in-progress. Under the sub-pillar of Infrastructure such as mobile network coverage and bandwidth performance, the WEF’s Network Readiness Index reflected a declining trend for Nepal over the last five years. According to the Digital Nepal Framework report, nearly one-third of Nepal’s population is still not covered by 3G networks. On the other hand, the 4G networks currently only cater to one-fifth of the population.

As Nepal continues to leverage cooperation with multiple countries and not solely relying on India to strengthen its technological capacities, its policymakers and business communities must start capitalizing on Nepal’s growing ICT facilities — forming linkages between its satellite, optic cables, and upcoming 5G networks can bring Nepal one step further to integrate with the global digital economy.

Chan Jia Hao is a Research Analyst at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore (NUS).