Internet Service Market in Nepal

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Internet Service Market in Nepal

• By
• Sanjeev Maharjan

2
Contents

• Internet History in Nepal
• Growth of Internet Market
• Internet Market Today
• Earlier Technologies Introduced By ISPs
• Need for High Speed Internet
• High Speed Technologies Introduced by ISPs
• ADSL as Superior Technology
• Why to prefer ADSL?
• Lessons for us!!!

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Internet History in Nepal

• E-mail services by Nepal Academy for Science and
  Technology First instance of use of Internet
  Technology
• Mercantile Office Systems First Private Sector
  to provide commercial e-mail service in June 1994
  
• Internet Services by Mercantile Started
• Connection with Singapore Telecom via 64 kbps
  leased line through NTC in 1995
• Mercantile became the First ISP of Nepal

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Internet History in Nepal

• 1995 2 more ISP proposed to start Internet
  services
• World Link Communications Computerland
  Communications
• September 1997 License issued to all three ISPs
• 1998 Formation of Nepal Telecommunications
  Authority (NTA) as per Telecommunications Act,
  1997.
• NTA is a telecommunications regulatory body

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Growth of Internet Market
Fiscal Year License Issued Cumulative ISP No
055/56 9 9
056/57 4 13
057/58 2 15
058/59 3 18
059/60 2 20
060/61 6 26
061/62 6 32
062/63 7 39
063/64 3 42
064/65 3 45
TABLE GRAPH Growth of ISPs Since the
Introduction of Internet Service in Nepal
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Internet Market Today

• Total number of Valid ISPs 35
• Total Number of VSAT Network Providers 7
• Total Number of VSAT Service Users 110
• Total Number of Internet Users
• 249,400 Internet users as of August, 20071.0
  of the population, according to ITU

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Need for High Speed Internet

• With the popularity and growth of internet
  services, the need of the customers also grew
• Need of High Speed Internet emerged among
  different business houses and the financial
  organizations

8
Earlier Technologies Introduced By ISPs
Technologies Available Speed
PSTN Dial-up 56 kbps
ISDN Dial-up 64 kbps, 128 kbps
Leased Line 64 kbps up to 8192 kbps

• PSTN Dial-up slow speed
• ISDN Dial-up Speed not as desired but expensive
• Leased Line High Speed but very costly

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High Speed Technologies Introduced by ISPs

• Cable Internet Technology
• Wireless Technology
• ADSL Technology
• (The most recent buzz in Internet Market)

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High Speed TechnologiesCable Internet Technology

• First introduced in Nepal By Subisu Cablenet Pvt.
  Ltd.
• Uses the broadband coaxial cable as the medium
• Requires cable modem as customer premise
  equipment (CPE)
• Raw Capacity of 30 Mbps
• But available speeds up to 256 Mbps
• Uses artificial Speed caps to limit speed of
  their customers

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High Speed TechnologiesCable Internet Technology
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High Speed TechnologiesCable Internet Technology

• Speed Cost Structure by Subisu Cablenet Pvt. Ltd

64 Kbps Link 64 Kbps Link 64 Kbps Link 64 Kbps Link
S.No. Speed Data Limit (in MB) Price (in Rs)
1 64 500 2585
2 64 1000 3500
3 64 1500 4500
4 64 2000 5500
128 Kbps Link 128 Kbps Link 128 Kbps Link 128 Kbps Link
1 128 500 3000
2 128 1000 4000
3 128 1500 5000
4 128 2000 6000
256 Kbps Link 256 Kbps Link 256 Kbps Link 256 Kbps Link
1 256 500 4000
2 256 1000 5000
3 256 1500 6000
4 256 2000 7000
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High Speed TechnologiesWireless Technology

• Introduced for commercial purpose in Internet in
  Nepal By Wordlink Communications Pvt. Ltd.
• Uses the Motorolas Canopy Technology to
  distribute the wireless technology (802.11)

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High Speed TechnologiesWireless Technology

• Speed and Cost Structure

Speed Upto 120 kbps  Wi-ZOOOM Cost  1 Month-Rs. 3500 3 Months-Rs. 9900 6 Months-Rs. 18000 12 Months-Rs. 34000 - 20 hrs Dial-up account free for back up purpose Installation cost Rs. 3500.00Subscription and Activation Rs. 6000.00 Speed Upto 150 kbps Wi-ZOOOM Cost 1 Month-Rs. 4500 3 Months-Rs. 12900 6 Months-Rs. 24600 12 Months-Rs. 45000 20 hrs Dial-up account free for back up purpose Installation cost Rs. 3500.00 Subscription and Activation Rs. 6000.00
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High Speed TechnologiesADSL Technology

• Stands for Asymmetric Digital Subscriber Line
• Type of DSL Technology
• Asymmetric in a sense Higher downstream rate
  from 512 kbps to 6Mbps
• Can be implemented in existing PSTN network with
  the use of ADSL Modems or Switch and the
  splitters
• Cost-Effective solution to high speed internet
  service need of the people

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High Speed TechnologiesADSL Technology
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High Speed TechnologiesADSL Technology

• Speed and Cost Structure

ADSL Speed (Kbps) Monthly rate for Internet (Rs) 3 Month Package (Rs) Monthly port charge (Rs)
128 Kbps 800 2400 100
256 Kbps 1400 4200 100
512 Kbps 2600 -- 100
1 Mbps 4900 -- 100
2 Mbps 9200 -- 100
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ADSL Vs Cable Vs Wireless
Factor ADSL Cable Internet Wireless (802.11)
Raw Speed Maximum 13Mbps Maximum 30Mbps Maximum 2Mbps
Available Speed 128 Kbps, 256 Kbps 64 Kbps,128 Kbps, 256 Kbps 120 Kbps, 150 Kbps
Cost (per month) Rs 900,Rs 1500 Rs 2585, Rs 3000, Rs 4000 Rs 3500, Rs 4500
Medium PSTN copper cable Broadband Coaxial cable ---------------
Infrastructure All over the country Limited to major cities Limited areas around country
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Why to prefer ADSL?

• Maximum districts reachable by other
  technologies 20
• With 72 district telephone exchanges, ADSL has
  larger network potential reach
• High Broadband Speed
• Minimized Switching and Installation cost
• Popularity and Growth of this technology all over
  the world

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Why to prefer ADSL?
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Lessons For Us!!!

• Cost-Reduction is a technique to enter the market
  with new technology
• New Technology accepted all over the world
  generates the positive feedback
• New Technology grows faster if the network base
  for the technology already exists in large
• Switching Costs are significant for shifting
  customers from one base to other

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