An internet outage in Nepal points to overdue payments to Indian telecom companies

6 Min Read

Image used for representational purposes only. | Photo credit: Getty Images

On May 3, home broadband customers across Nepal experienced significant downtime of about five hours because internet service providers (ISPs) were unable to pay bandwidth charges to the company that controls much of the country’s access to the global Internet: Bharti Airtel Ltd. A tax dispute between Nepalese ISPs and the country’s government, which had been going on for months, led to a situation where ISPs’ requests for permission to purchase US dollars to pay Airtel were stalled, with one director canceling the collective outstanding dues to Indian bandwidth providers estimated at Rs 200 crore.

The ISP Association of Nepal (ISPAN) held a press conference in Kathmandu the day before and warned the media that the long delay in payments would result in the landlocked country losing all internet access. Sudhir Parajuli, the president of ISPAN, said this The Hindu a phone interview from the US reveals that Airtel provides about 80% of Nepali ISPs’ bandwidth needs, with the rest largely provided by Tata Communications Ltd and two small connections from China.

Mohammad Amer, a director of Airtel Business who addressed an audience in Kathmandu last year about the company’s operations in the country, estimated that half of Nepal’s upstream internet traffic comes from Airtel.

Despite ISPAN’s warnings, Nepal’s Ministry of Communications and Information Technology has not approved ISPs’ foreign exchange requests, Mr. Parajuli said. Airtel shut down connectivity for five hours and restored it only after the Nepal Telecommunications Authority assured the company that the issues that led to the payment delays would be resolved. The hours-long lapse highlighted Nepal’s heavy dependence on Airtel and Tata Communications Ltd, and the vastly different nature of internet connectivity growth in India’s neighbors.

See also  The Philippines is calling for the expulsion of Chinese diplomats as the South China Sea row escalates

Unlike India, where the entry of Reliance Jio Infocomm Ltd in 2016 led to falling prices, internet prices in Nepal only fell in the area of ​​home landline broadband when the Chaudhary Group and DishHome, two major Nepalese conglomerates, during the pandemic entered the market. to the growing demand for internet access. 92% of Nepal’s data traffic is served through wired broadband which is dependent on bandwidth from India, said ISPAN’s Mr Parajuli.

Much of this boom is being driven by just two companies, Airtel and Tata. Less than a dozen data centers exist in Nepal to cache and serve content locally. Airtel operates three land connections to Nepal from India; the first, built in 2009, was located between the border towns of Sonauli in Uttar Pradesh and Butwal in Lumbini. In the following years, two more came between Forbisganj in Bihar and Biratnagar in Koshi, and Raxaul, Bihar and Birgunj, Madhes Pradesh. Together, Airtel’s Mr Amer said, these connections account for 5 terabit of capacity, while another connection is planned between Nepalganj and India.

Indian companies selling bandwidth to Nepal have been frustrated by the standoff between ISPs and the Nepalese government, which has demanded retroactive taxes on components that Mr Parajuli claimed had been declared invalid by the country’s Supreme Court. supported by a parliamentary committee that met during the previous government. The core of the dispute, said the CEO of a leading ISP in Nepal The Hinduwas that the government has been demanding back taxes on maintenance work that ISPs spend on, in addition to the levies on monthly rentals they collect from subscribers.

See also  A 'bionic eye' scan of an ancient, scorched scroll points to Plato's long-lost grave

While this dispute continues, the director said, Nepalese ISPs have not paid Airtel or Tata for 13 months. Although Nepalese government officials have assured Airtel that the issue will be resolved, there appear to be no foreign exchange approvals for the companies. These issues have stalled the willingness of at least one Indian company to invest in Nepali ISPs.

“Sify Technologies was active in this market for four years and we stopped providing service [there] for the past two years due to payment issues of ISPs in Nepal,” a Sify spokesperson said The Hindu. “Residents of ISPs in Nepal have had large outstanding payments for an extremely long time, with no resolution in sight.”

Wireless telecom companies do not face the same problems: state-owned Nepal Telecom (NTC) announced in January that it would buy 200 gigabits per second of capacity from India. Mr Parajuli said that since NTC is government-owned, it does not have to deal with bureaucratic hassles that ISPs face in obtaining permission to pay dollars to upstream providers.

The Nepalese broadband manager said this The Hindu that bandwidth from Airtel and Tata typically costs $2 per megabit per month of connectivity, with rates dropping as an ISP buys more bandwidth. While ISPs are spending more on labor costs and laying cables, these prices are much higher than in India, according to an estimate from the head of an Indian ISP.

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *