Nepali Times: What is the business rationale for your investment in the Nepali telecom market at a time when most foreign investors are not very optimistic?
Pasi Koistinen: As with the case of a rapidly growing business player, TeliaSonera needs to spread its wings. Where better than countries with low penetration and good growth prospects? Nepal has a sizeable and young population, low fixed-line and mobile penetration, and good prospects for economic growth. We are a long-term strategic investor, and look decades ahead. TeliaSonera invested in Kazakhstan after the collapse of the Soviet Union
and now has a billion dollar business there.
We also feel privileged to contribute to Nepal's economic growth. Ncell was the second largest taxpayer in Nepal in 2009. Every 10 per cent increase in mobile penetration in a developing country drives a 1.2 per cent increase in GDP growth. Telecommunication services drive growth, competitiveness and the transition to a knowledge-based society. The mobile infrastructure we are building in Nepal, using state-of-the-art technology from globally renowned vendors, will serve Nepal and its citizens and also help make Nepal a more competitive economy.
What is the potential size of the Nepali market and when do you expect the present growth rate of mobile penetration to plateau?
When Ncell was established in 2004, mobile penetration in Nepal was under 10 per cent. Now we estimate it to have passed 20 per cent. Growth will be faster, but it will take some time until the market is saturated. Penetration will to a large extent depend on mobile network expansion efforts. We believe that people in Nepal are in need of communication services, especially in remote rural areas, and that more people will be willing to use our services as we expand our network. Penetration in Nepal will be mainly driven by voice traffic for now, but we also expect mobile data to take off, because the mobile network offers the fastest and easiest access to the Internet.
We recently rebranded Mero Mobile to Ncell, though our previous brand was very young. The rebranding has revitalised our image and increased the energy and enthusiasm of our employees. It has also been a fresh change for our customers. Ncell, its colour, logo and the whole outlook have generated the desired curiosity and expected feedback. The response has been very rewarding, and our purple colour has set the trend for the country's fashion. The idea behind the new brand was to position Ncell as a part of a big international group of leading mobile operators, owned by a leading European telecommunication company, TeliaSonera. The message is that we are here for Nepal, we are a reliable and committed industrial investor, bringing much-needed communication services to the people living here. However, although we are part of an international group, striving to implement and maintain all the relevant international standards of fair and equal business practices, employee and customer treatment, we are at the same time a company with a strong local Nepali identity that respects the local culture, traditions and heritage.
Customers have a lot of complaints about connectivity and the quality of mobile phone services in Nepal. Why are services still below international standards?
Over the past year, Ncell has dramatically improved its network quality. We have extended our network to cover about 60 per cent of Nepal's population, a major leap in the country's telecommunication industry. We are continuously working on improving connectivity and I believe our customers have been experiencing this. Building mobile communication infrastructure requires sizeable investment, so we are making improvements gradually according to our business plan. However, I believe that with our latest efforts, we already have very good network quality and in-network connectivity. And we are in continuous talks with our industry partners in Nepal and abroad to improve inter-network connectivity.
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