Nepali Times
Phony business


If you haven't read the fine print, here it is:

. A three-minute call from a pre-paid phone to a post-paid phone is nearly 38 times more expensive than a call between two fixed lines at non-peak hours.
. The call you could make on a landline for Rs 1.30 can cost Rs 24 if you called a land phone using a pre-paid mobile phone.
. If a friend calls you between 10PM and 6AM, the receiving call in your post or pre-paid phone is free but the caller ends up paying for every minute even if a land phone is used.

Most telephone users think that since there are more phone services to choose from, the prices have gone down. Not true. In fact, the variety of services have thrown up a bewildering array of tariffs and price structures which most consumers aren't even aware of.

"I got the shock of my life when I got my first bill," says Gopal Lama, a driver who stood in line for two days to get a pre-paid SIM card earlier this year. Lama has now sold it to a friend. He just can't afford to use it.

Most consumers are so happy with the status symbol of a new mobile phone that they aren't even aware they are being ripped off. Most don't bother to find out the price of calls, the times they are cheaper and the astronomical mark-ups when using pre-paid cards.

But that's OK. Even the Nepal Telecommunication Authority (NTA), is not sure if Nepal Telecom's mobile tariffs are justified. The government regulator allowed Nepal Telecom (recently turned into a company) to fix charges to get a 25 percent return on its annual investment. The trouble is NTA is not able to monitor whether its own rules are being followed and Nepal Telecom hasn't reported cost and investment details. "We are still waiting for Telecom's reports," admits NTA spokesman Kailash Neupane. "We have time and again questioned them about pricing methods and asked them to reduce tariffs."

The Authority has received complaints about high phone costs from consumer groups. A group of lawyers recently demanded that NTA remove the 30 percent pricing difference between pre-paid and post-paid services. The NTA simply forwarded the demand to Nepal Telecom and that was that.

When asked, Nepal Telecom justified its high costs saying it used to subsidise fixed line costs from surcharges on international calls. But when income from international calls plummeted worldwide, it was forced to transfer the surcharge to mobile users. "We had no choice," explains Nepal Telecom's Managing Director, Sugat Ratna Kansakar. "But our mobile phone tariffs are still cheaper than those of Singapore and some South Asian countries."

But should differences in tariff of fixed and mobile lines be so wide? Why should a pre-paid mobile user calling a post-paid phone pay 38 times more than the price of a call between two landline phone sets? And why can't our local calls be as rock-bottom cheap as in India, where deregulation has benefitted consumers?

Kansakar says the difference grew after Telecom reduced the cost of local calls: "We reduced landline costs to promote internet use in Nepal."

As in India, the price of mobile services could go down with more competitors in the market. The government has deregulated the telecommunication sector and the Indian joint-venture Spice Telecom is getting ready to start with new investors after a two-year delay.

"Once there are other operators, the prices of mobile phones will certainly go down," says NR Mokhariwale, chief of United Telecom Limited (UTL) which last year launched phone services in Kathmandu Valley with its 'wireless local loop' technology. (see Economy)

While consumers wait for prices to fall, it would help if they analysed the pricing structure of the phone service they have. Consumers, for instance, don't even know that there is a budget call scheme through Nepal Telecom to call any country in the world for only Rs 25 per minute.

We put it to Nepal Telecom that consumers may not be aware because it hasn't told them about it. Kansakar says public awareness is a problem. He admits: "Perhaps our publicity has not been enough."

Types of call 8AM-6PM (call charge Nrs) 10PM-6AM
Local to local call 1.27 per 2 mins 1.27 per 8 mins
Local line to post-paid 5.08 per 2 mins 10.16 per 8 mins
Local to pre-paid call 5.80 per 2 mins 10.16 per 8 mins
Post-paid to local 9.16 per 2 mins 14.44 per 8 mins
Pre-paid to local 11.88 per 2 mins 47.52 per 8 mins
Post-paid to pre-paid 10.68 per 2 mins 36.64 per 8 mins
Pre-paid to post-paid 13.14 per 2 mins 47.52 per 8 mins

(11 JAN 2013 - 17 JAN 2013)