As the cut-throat price war among telephone operators put pressure on its profit growth, the state-owned Nepal Telecom will now stay away from the fight and focus on providing quality service.
NT has been facing mounting criticism over its poor service quality, especially in the mobile service.
NT’s income in the last fiscal year increased by just 2.96 percent to Rs 28.18 billion. It had posted a growth of 22.30 percent to register Rs 27.22 billion in revenue in 2009-10 compared to Rs 22.25 billion in 2008-09.
NT officials said the income growth comparatively came down due to the price war among telecom operators. NT, Ncell and United Telecom Limited have been in a race to cut down call tariffs for the last couple of years. “Our subscriber base increased by 24 percent, but income has not increased accordingly. This is because of the competition in the market to reduce tariff,” said Bishwa Nath Goyal, managing director of NT, at an interaction on NT’s plan and policies for the current fiscal year. “We will improve out network to offer better service instead of reducing call tariff.”
NT’s total number of subscribers increased to 6.78 million as of the last fiscal year—a growth of by 24 percent. It attracted 1.24 million new subscribers in GSM mobile, 101,000 in CDMA and 20,000 subscribers in the landline phone.
Subscribers have long been demanding improvement in NT’s service quality. Goyal also assured to improve call quality. “Subscribers will be able to experience a better quality service within one-and-a-half months, as we are adding some new base transcriber stations (BTS) and also upgrading the existing ones,” he added.
According to NT, it paid Rs 17.49 billion in revenue to the government for the last fiscal year. The revenue amount includes Rs 1.23 billion in royalty fee, Rs 4.54 income tax, Rs 6.45 billion for value added tax and telecommunication service fee. It also gave Rs 5.48 billion as dividends.
For the current fiscal year, with the allocation of Rs 14.47 billion, NT has targeted to post 10.61 percent growth in its total income to Rs 31 billion. It also aims to add 1.65 million subscribers, including 1.23 million in GSM mobile. It is also all set to call a global tender for adding 10 million GSM lines.
Surendra Prasad Thike, deputy managing director and spokesperson for NT, said the revenue target would be achieved through the support of the income generated from value added services and ADSL data service. “The target will prove difficult to achieve through voice service alone amid stiff competition in the market.”
NT’s main targets for the current fiscal year includes improving the mobile service by adding new BTSs and upgrading existing ones, installing an international gateway based on IP technology, distributing phone lines based on NGN technology, increasing value added services and massive expansion of data service in rural areas. “Our plans for the current fiscal year will help the government take broad band in all villages and provide phone service on demand,” said Thike.
NT’s other plans include providing Blackberry service, establishing direct interconnection with Saudi Arabia, Singapore, Australia, Hong Kong and the US and distributing 2 million IP technology based CDMA service. It also plans to start a service that will allow subscribers of post-paid mobile, landline and ADSL to pay bills through recharge cards and introduce electronic pin-less recharge cards worth.
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