Nepal Government Plans Subscription-Based Telecom Services: NTC & Ncell to Follow

Nepal’s telecom sector is set for a major shift as government of Nepal to let operator’s adopt subscription-based telecom services. Sharing its 10-key delivery-based plans for better communication services, the government said that it will coordinate with NTA to have telcos (NTC and likely Ncell too) launch subscription-based data services. This will change the way millions of users pay for their mobile data subscription in telcos like Ntc, Ncell. So, it is expected to bring huge financial relief to the telcos while also bringing a fresh and innovative behavior change in how telecom service is used in Nepal.

Both Nepal Telecom (NTC) and Ncell had already been discussing starting subscription model plansfor their customers for a while. They started looking at ways to improve their financial conditions and generate revenues, as it’s becoming hard to survive and sustain. With the government announcing its policy-level stance in its favor, the ground is now set for the newer and more innovative ways of using telco services.

In this article, we discuss what a subscription service is in the telecom industry, what it means for users in Nepal, and how NTA could shape the direction.

What is a subscription-based telecom service model?

In telecom, a subscription-based service refers to a type of service where users pay for a subscription plan recurrently. To illustrate, currently, you recharge your SIM and use services such as voice, data, SMS, and other value-added services (VAS) either by package or PayG. However, with a subscription model, you get one service or a bundle in packs for a fixed duration (mostly monthly), and it is repeated in another cycle (month) regularly. Let’s say you buy a subscription plan for 30 days at a certain cost, at a fixed price. Mostly, a mobile subscription plan comes with Voice, data, and SMS, with a different range of volume/resources targeting different kinds of users.

In this type of service, when a subscription ends, mobile plans renew themselves like Ncell auto-renewal packs. And the best part of it is that it will make resources more affordable (more on that below), and you won’t have to buy packs frequently or pay in the PAYG model, which is costly.

In a strict sense, you will not be allowed to use any mobile service unless you buy a subscription plan, starting from basic resources to advanced having maximum resources. From the very moment you buy a SIM, you need to subscribe to a plan. Let’s say, a basic subscription could start at Rs 199 per month with a couple of GB of data, 100 mins of calls, and 100 SMS. Similarly, the advanced subscription, priced at Rs 1200 to 1500, could provide you with multiple tens of GB of data with unlimited data (at fallback speed), unlimited calls, and 500 SMS.

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Is a subscription model telco service already adopted in Nepal?

Ncell has sort of started a subscription-based telecom service in Nepal with its auto-renewal packs, but it is optional at the moment. In this pack, you can buy data packs from Rs 399 to Rs 1499 and voice packs starting at Rs 199.  But the telco hasn’t made it the only way of service. You can choose not to use this subscription and continue using Ncell services by recharging your mobile balance and keeping its validity.

Ntc, on the other hand, has been looking into ways it can start a subscription model for customers. The company already provides a similar bundle service for its postpaid users. Soon, the company could be launching auto-renewing packs for the benefit of its customers. And that could lead to a subscription model in the future. Check out: All Ntc mobile data prices

Subscription model advantages

• Renewal facility: Subscription model service is based on renewal. Your subscription plan or package is renewed automatically to continue using the service. It’s that simple that keeps things straightforward.
• Roll over / Carry over feature: The remaining resources, such as voice and data packs are rolled over to the next subscription, ensuring that every penny is fully spent.
• Convenience: Things become simple and easy with a subscription-based service. You don’t need to navigate through available packs. You can choose a plan and enjoy the services from your carrier. Telcos will make subscription model service easy to understand and basic for all to subscribe.
• Affordability: Another key highlight of this type of telecom service is affordability. The good news is that previous Ncell CEO and MD Jabbor Kayumov has himself claimed that a subscription-based service will make service costs up to 80% cheaper. How great would that be if true!
• Elevated user behavior: So far, you have been recharging your mobile balance to use telecom services. However, with a subscription model, you will have a different and perhaps more engaging user experience. By spending a minimum amount regularly, you will be using more telecom services- data, voice, SMS, etc. So, you will get more resources to stay connected at an affordable price.
• Revenues to the government: Another reason to push for subscription-based service is that it will generate more revenues to the government. Due to the current state of things, both telco companies and the government have seen a decline in their revenues. But a subscription model will keep users tied to plans and promote a minimum spending habit. This will lead to higher revenues for the companies and higher revenues for the government as well.

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Subscription model disadvantages

• Mandatory purchase: A subscription model works on just that – subscription. And this may not sit well with other users who don’t want to pay for a plan on a regular basis. For e.g., you use mobile services very little, but the minimum spending is also high compared to your possible monthly uses. In such a scenario, buying a subscription plan feels less attractive an option. But it depends on the kind of plans telecom companies will offer. So, we have to wait on that when they start a subscription-type service.
• Difficulty in adaptation: Switching to a new way of service could pose a difficulty for users. The subscription model is new to Nepali mobile users. So far, we have used carrier services by recharging our SIMs and keeping their validity. Switching to a plan-based service with a fixed cost is different from the current flexible one. So, some of us will take time to adapt and accept this new way of mobile plans.
• Less flexible: The subscription model makes it mandatory for users to buy plans to use carrier services. If you don’t buy a plan, it’s likely you won’t be able to use voice, data, and SMS service, as well as receive incoming calls. This heavily contrasts with the current ways of usage, where you top-up mobile balance, buy packs, or opt for the Pay-As-You-Go (PAYG) model. So, it might seem less flexible to some. However, in the long run, once you become accustomed, you will be more fond of such a subscription than the regular one.
• No guarantee it will fly: So far, there’s only talk of this type of service coming into play. However, both telcos Ntc and Ncell, the regulator NTA, and other stakeholders will have to come into agreement for it. Again, there’s no assurance that it will be popular and accepted by the users. So, as of now, we are only exploring what it’s like and what it would bring to the industry.

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Opinions differ among Ncell, Ntc, and Nta on subscription model telecom services

But despite the ongoing discourse on subscription-model services, Ntc and Ncell have had their own reservations on it since the beginning. Below, we explore how the two telcos have talked about it in detail.

Ncell on Subscription Model

Ncell has remained vocal for its adoption at the earliest. “We have long treated the subscription-based model as a necessary measure for the long-term survival and development of the industry. This model will not be expensive for the customer. But it will rather make services more accessible,” Former Ncell CEO Jabbor Kayumov said.

“As it is not about increasing prices but in fact about making services cheaper for customers. Ncell recently launched a renewal feature, and this is the most customer-centric move, as customers are tired of buying their favorite pack every month,” he added.

Further, he said that “Users get higher validity and won’t need to worry about subscribing to packs every 28 days anymore. Subscribers who use services for free would have to begin paying a nominal fee for a mobile subscription.

“It’s the need of the hour to jointly work out a modality proactively,” he declared.

He also claimed that, against the current packages and PAYG model, voice packs are almost 7X cheaper than data packs, about 80X cheaper, and combo packs are in fact 2X cheaper than individual voice and data packs in the subscription model.

Ntc on Subscription Model

Government-backed Ntc says that while it’s discussing subscription services, it will not immediately launch them. “We are studying, but there’s no plan to start such service in the near future,” the company’s then spokesman Hari Dhakal said.

“This kind of model is available in our postpaid service, but not in prepaid. If the package is taken to recurring payment, it will be a subscription model. We will adopt such a model once customers demand it.”

He did highlight the positive aspects of the subscription model. He said that it guarantees revenues for the company and helps predict income. Also, customers won’t have to worry about buying packs frequently.

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Nta on Subscription Model

Meanwhile, Nta chairman Bhupendra Bhandari had earlier argued that companies shouldn’t bring a subscription model at least for the time being. He said that it is necessary to ensure consumer rights before implementing such a new model. Bhandari maintained that the subscription model is only possible when user access, convenience, and transparency are achievable in the industry. But he did admit the positive sides of the new business model.

“We are positive about increasing the income of telecom service providers. But we should go for the subscription model only by keeping the issues of consumer rights and network availability as a precondition,” he said. Currently 3.3 million users still rely on 2G network in Nepal. We also have customers who use monthly recharges of 50 and 100 rupees. It is not fair to create a compulsion for those customers to take a service of 200 rupees per month. Such a subscription model does not fit the Nepali market.”

The NTA chairman had suggested that telcos provide packs in small clusters per month instead of offering fixed-price service with a 7-day expiry date. “Let’s work step by step on how to take the people who are currently using a monthly service of Rs 200 to Rs 500,” he said. “If we need an annual increase of 5/10 percent in the income target, we must also ensure the rights of the consumers. We must satisfy the government and all stakeholders.”

At that time, he had also directed telecom companies to get approval from the authority when launching new products like the renewal packs.

But with the Balen Shah-led government making a clear stance on it, NTA will also be drawn to implement it.

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FAQ on subscription model in telecom services of Nepal

Our verdict

Subscription model service is new for the Nepalese Telecom sector, but it seems market-bound. The industry is reeling from a streak of poor financial gains. Growth of OTT apps, lack of service diversification, telecom policies, etc., are putting pressure on telecom companies to explore options to trigger income. So, it seems that a subscription model telecom service looks like an ideal solution. Maybe NTA, Ntc, and Ncell all come together for this approach sooner. It is also beneficial for customers in the long run as a strong telecom industry drives innovative and modern technology advancements.

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We hope that if subscription service becomes the norm, it will be logical, scientific, and accessible for our pockets. What do you think of the subscription model being adopted in Nepal? Would you like to buy plans to connect for services and renew on its own? Share your feedback in the comment section below.