The capital's social circuit is abuzz with talk about high-speed broadband Internet. Having a dial-up email account makes you a social outcast, people are showing off about the speed of their cable Internet as if they were talking about a new sporty motorcycle.

Broadband technology is not new in Nepal. Corporations and aid agencies were already using the system through wireless and cable modems provided by ISPs such as Mercantile, Worldlink, Subisu, Vianet and ITNTI. But the service providers are now diversifying into home-based surfers by making broadband Internet affordable so that clients can get not just the Internet but also cable television through the same pipe.

The best thing about broadband is that it does not require a telephone line for network connectivity. This reduces the cost of surfing by more than half since phone calls are so expensive.

Then, Internet speed is up to 20 times faster than a dial-up modem and is online 24 hours.

"Broadband is still seen as a luxury but with affordable prices, this concept is changing," says Rupesh Sakya of Worldlink, which is providing broadband connections through its radio modems to several upper middle class neighbourhoods in Kathmandu and Patan. The company plans to market cable modem connections and replace dial-up

"The prices will gradually go down as more people start subscribing," says Sudhir Parajuli of Subisu, which claims to have the largest number of home based broadband users. Started with a handful of young Nepali IT engineers from Bangalore, Subisu has been making waves in the market. Within a year, the company has managed to penetrate into middle class homes in the Valley. All it costs is Rs 999 a month and the customers get broadband connection along with 80 television channels.

Co-axial broadband is cheaper for several reasons. Unlike wireless radio broadband, the operator does not have to get a license for each subscriber. There is still a huge hassle for getting a subscriber license for wireless modems. The license has to be processed both at the Ministry of Communication and Information as well as the Nepal Telecommunications Authority. "For wireless broadband, there is always the regulatory issue. Unless our laws change, marketing wireless at the household level won't be feasible," explains Binay Bohra from Vianet, which specialises in wireless broadband networking.

Even for cable broadband, there are several hurdles. The cables have to be linked through the street electricity poles for the network and the ISP has to pay an annual rent for every pole used. This is becoming quite expensive for Subisu, which specialises on cable broadband Internet. "It's not only expensive but also time consuming, we can't keep up with the growing demand," explains Parajuli.

Despite all the hype about broadband, only a few home-based surfers have been able to access the system. There are reportedly less than 500 individuals who have subscribed to broadband Internet and most of the ISPs are concentrating within the city core. Consumers living outside the Ring Road have given up hoping for high-speed Internet reaching them anytime soon. "If we are to convert dial-up users into broadband consumers, we have to first ensure quality service," says Rajat Kayastha from Mercantile.

The competition in the market is stiff and the five ISPs are working on the new major offers to be announced during the Computer Association of Nepal (CAN) event next week.

Offers are already available with annual subscription charges ranging from Rs 6,000 to Rs 10,000 per year. The price also depends on the range of bandwidth choices from 64-256 kbps. The installation charges have higher costs while the monthly subscription costs are far lesser compared to the monthly telephone bills paid through the dial-up system. For night surfers, the monthly charge could come down to just Rs 500 a month.

Further competition is expected to come from Spacetime which plans to launch its own broadband Internet through fibre optic. "We plan to reach atleast 10,000 consumers" says Akbar Shah of Spacetime.

"The charm of broadband is once you get the hang of it, you can't do without it, unfortunately costs are still very high for individual subscribers," explains Mahendra Vesawkar from ITNTI, which caters solely to corporate houses.

Internet is very expensive in Nepal, it depends on satellite connection via Singapore, Hong Kong and Japan because ISPs have to pay at least $2,500-3,000 per megabit in addition to taxes, VAT, royalties and so on.
"Information Technology is perhaps the most heavily taxed industry in Nepal," says Vianet's Bohra. "The pie is still very small." The only way to cut down costs is to change uplink sources and this is possible by accessing through the landline connection through India. "Otherwise, ISPs can't afford to lower the prices and if they do the quality of service will drop, which we don't want to do," says Prachanda Man Sakya from Mercantile.

At the moment, some families get a monthly phone bill of Rs 4,000 even though their Internet costs only Rs 1,000 a month. It is obvious that dial-up Internet will be obsolete once people start calculating how much cheaper it is to have Internet through cable.