At is no longer a luxury item. Call it an information kit, or an idiot box, but the television set has become a utility like other home appliances. Television has become a necessity in urban Nepali homes.

The proliferation of new Nepali channels and the spread of cable have boosted domestic demand for tv sets, and distributors can't keep up with demand.

Even those from the lower middle class have joined the bandwagon, and they have a wide range of choices: from black and white and colour sets manufactured in Nepal to cheap imports from China-all under Rs 10,000.

Then there is the upper end of the market with flat tubes, LCD and plasma screens. There are installment-payment schemes, which means even the more expensive models are suddenly affordable. Add to that the exchange scheme under which you can trade in your old tv for a new one and the choices are wide open.

Tv manufacturers and dealers know well how indispensable the gadget has become. They report more than 60,000 television sets sold last year alone, and this year it looks like sales will top 100,000. Major players in the television market have registered an annual growth of an unbelievable 50 percent in sales. Increasing purchasing capacity of consumers in the urban areas, expanding rural electrification and the spread of cable networks have translated into more and more buyers.

The latest rage seems to be flat-screen tvs. Almost all established brands have them, successfully increasing their number of consumers. With better picture and sound quality and the capacity to decode channels, flat screen TVs are in vogue. The good news for buyers is that the prices of flatrons are being slashed. "Since they are becoming more and more affordable for middle class consumers, many go for the flat screens," says Saurabh Jyoti of Jyoti Group, which imports Philips sets from Singapore. To meet the soaring demand, his company has opened a brand new showroom in Kathmandu and started outlets in Pokhara and Birgunj.

Him Electronics sells Daewoo and Samsung sets and sees flat tvs as a value segment with bright growth potential. Its General Manager, Prabhakar Thapa, says 80 percent of the buyers go for ordinary colour tv but their tastes are changing: "Within one year, we expect to see that figure come down by half." The company manufactures nearly all its products in Nepal.

The price range varies from Rs 25-40,000 for 21 inch flat-screen sets of different brands. For rural Nepal, getting a conventional colour tv set is more than enough for now with prices that range from Rs 15-20,000. Dealers have seen that the government's policy of expanding electricity with the participation of the locals has resulted in greater demand for tv sets even in villages.

"We see many more rural people coming to buy tv sets these days," says Subash Saraugi of Distar, a Thai Company that has been selling 14 and 21-inch sets in Nepal. "Once the security situation improves, we are sure that there will be another big rise in sales."

Despite the growth and the potential, tv dealers and manufacturers face unhealthy competition due to smuggling and parallel import of tv sets. The smugglers can cut prices and sell their products without proper VAT bills and invoices. "Such sellers price the sets very low because they don't even pay customs duty, but we do and that adds up to 40 percent to the cost price," says Jyoti.

Most cheap products are now coming in from China. This has left some dealers and manufacturers worried. But some think this will increase the size of the pie and ultimately the customers will go for better quality.

"The cheap brands are doing us a service by expanding the market," says Sarbjit S Anthak of Chaudhary Group which assembles the Korean GoldStar brand. "Once people start watching colour TV they won't stop and their next purchase will always be a better brand. That means our market is secured."