Operators in Nepal are facing a variety of challenges such as a stiff competition and keeping up the revenues. However, Nepal Telecom, Nepal's largest telecom operator, sees challenges as opportunities. “I have always concentrated more on opportunities than the underlying challenges,” says Dilli Ram Adhikari, Managing Director of Nepal Telecom, who shares with us how the company is catering to the changing technological trends, such as the decline of fixed-line connection, the emerging 5G, and IT/CT convergence, to tap new revenue streams.
You are arguably the youngest Managing Director in the history of Nepal Telecom. What challenges have you faced so far? What's your take on the current voice and data business of Nepal Telecom?
Nepal Telecom has been serving in Nepal under different names for over 100 years. I don't have concrete evidence to claim myself as the youngest Managing Director in its history. However, I was able to cement my place as a Managing Director through an open competition announced by the Government of Nepal in a relatively short career span. I joined Nepal Telecom in 2003 and I was fortunate enough to have this high-flying career.
As an optimistic person, I have always concentrated more on opportunities than the underlying challenges. When I became the Managing Director of Nepal Telecom, we were in a state of roll-out stagnation as far as technology is concerned. We were falling behind other operators on 4G and FTTH expansion. The immediate challenge was to keep these technologies on board and roll-out such projects as quickly as possible. I had the faith and support of my fellow employees, board of directors and ministry with me. This overwhelming support allowed me to overcome those challenges with ease and we were able to roll-out such projects in the right time and in the right direction.
Another major challenge has been keeping up the revenues in the post-Covid-19 era. As with other operators around the world, we are facing an unanticipated amount of revenue loss in domestic and international voice and roaming traffic. On the other hand, the uptake for data services has been very exciting and encouraging. We have seen nearly 300% surge in our data traffic, and we are very proud to have lived up to the expectation of our public during these tumultuous times.
To sum up, we have more challenges to keep up our revenues for voice traffic whereas we have enormous opportunities to capitalize on data business.
The pandemic has changed the very nature of the global business ecosystem and has left us with an economic future that has never been more ambiguous. What were the technical and operational challenges faced by Nepal Telecom during the pandemic, and what solutions have provided people with reliable connectivity the most?
Nepal Telecom has definitely been an unsung hero in this pandemic offering seamless connectivity at affordable rates. We provided extremely reduced cost packages such as “stay connected”, “Zero balance offers” to shoulder our responsibilities in this pandemic. As with other operators around the world, our supply chain or SIM cards and top-up cards got severely affected due to lengthy lockdowns and restricted movements. We were confronted with several impediments for smooth operational and maintenance activities. Our 4G roll-out schedules got derailed. We also faced an astronomically huge demand of internet traffic along the way.
In order to overcome the challenges, we augmented our backbone network capacity and our international IP connectivity capacity. We were constantly in touch with concerned administrative bodies throughout the country to avail passes to carry out our O&M activities. Our core technical teams were working more than 16 hours a day from home to address the hefty traffic that were flowing through our networks. We also motivated our customers to use digital payment methods for top-up services.
In such a challenging environment, do you think there is an increasing need to change the way you serve your customers, with more automation and self-serve tools to improve efficiency?
Indeed, the biggest challenge in present context is to retain our customer base in a stiff competitive environment. The method that we deployed to address our customers' grievances and complaints will not be as effective as it used to be in the past. Customer support automation will eliminate the need for human involvement and perform services with better efficiency. One of the biggest advantages of automation for large corporates like us is to off-load the human-to-human touch points when they're either inefficient or unnecessary. We have already geared up to bring automation and self-serve tools to provide better and efficient customer services. We have already set up enhanced customer contact service and are in the process of procuring Business Intelligence Systems, state-of-the-art automated NOC tied up with our customer contact center. We have re-vitalized our mobile app and websites with self-serve options to provide better customer services.
However, we are also well aware of the underlying threat that hovers around automation which is the “set-it-and-forget-it mentality”. As a result, our customer service executives are also constantly in touch on a human level to handle our customers' grievances.
With fixed-line connection declining and mobile penetration at the saturation point, what is Nepal Telecom doing to develop new revenue streams?
Many operators are faced with this same set of challenges. In order to cope up with declining legacy PSTN lines connection, we are trying to add value to those services through FTTH and providing seamless voice and data services at attractive rates. We've just started to roll-out FTTH services in an aggressive manner and the response for uptake has been overwhelming. We have seen significant uptake of fixed broadband services in exchanges where we have migrated from legacy PSTN to FTTH technology. We will soon be launching IPTV services to cater to our customer needs through FTTH connections. We are well aware that the traditional revenue streams are drying up faster. We are working very hard to introduce new services to existing bundles and add up revenues.
We've also found that customers are happy and willing to pay more for pleasant experiences and strong brand bonding. We are also focusing a lot on verticals. In order to use our existing brand to build our financial services portfolio, we have tied up with Rastriya Banijya Bank, a government bank, and recently, launched our new subsidiary company called “Nepal Digital Payment Company (NDPC)” for rolling out the digital payment services (Mobile Money) to our customers. We are venturing out in enterprise market segment with bundled services along with IOT and M2M services.
What is your take on fixed-mobile convergence (FMC)?
Fixed-mobile convergence is such an exciting solution for a multi-service provider like us. Through FMC our mobile customers can be seamlessly integrated with the fixed network infrastructure of their organizations, which will be an added benefit. For instance, it will help us provide seamless service experience for N-play services to consumers across connected devices at home and on the move. We need to deep dive and formulate specific plans as well as contingent strategies to address issues such as backward compatibility, interoperability, CRM and many more before taking initial steps on FMC.
Telecom services in Nepal are mostly centered in urban pockets. So, what is Nepal Telecom's plan for the easy access to telecom services for population living in rural areas?
As a public enterprise, our goal is not limited to improving our financial bottom lines. We have always relished the challenges of being at the front lines of bridging the digital divide in Nepal. Our aim is to improve the quality of life of individuals residing in rural areas through connectivity. Currently, we have signed a deal with our regulator to provide backbone infrastructure in five provinces through the universal service obligation (USO) fund called the Rural Telecommunication Development Fund (RTDF) Mobilization project.
We have already begun our work on field in three provinces. In this same pursuit of rural connectivity, we have already signed a deal with some of the private partners to provide wireless broadband services in rural areas. Our tariff rates are competitive and affordable to the general public. We've recently signed a deal with ZTE Corporation to procure mini OLTs for FTTH deployment in rural areas. Despite enormous capital and operational costs, we will never shy away from our responsibility of connecting the unconnected.
Innovations of latest technologies have immensely aided the development of the telecommunications sector. Which latest technology is Nepal Telecom looking for implementation?
We are keeping our eyes and ears open to 5G. In fact, we are rolling out a few 5G base stations as a pilot project in our existing 4G LTE network upgrade project. Our technical team is already exploring the feasibility of Wi-Fi 6 and also making a realistic assessment of our roadmap towards massive 5G deployments. Once we receive a spectrum confirmation for 5G from our regulator, we will accelerate our 5G deployments. We will also be investing a significant amount of money on Big Data and Data Centers in the days ahead. We've also provided connectivity services to Nepal Electricity Authority for their smart meter projects and are looking forward to launching IOT products for our enterprise customers. We will roll out mobile financial services very soon and provide mobile money/digital payment services to our valued customers.
To what extent will the blending of IT and telecom into a more fully integrated ICT sector impact the structure and strategies of telecom operators like Nepal Telecom?
We are very fortunate to have a very strong IT team in Nepal Telecom and the synergic effect of IT and Telecom will definitely sharpen our competitiveness in the market. Marriage between banking and telecom technologies gave birth to our mobile financial services. In the same fashion, the blending of IT and Telecom sector will provide newer opportunities and added revenue streams. Through blending, our services will not only be limited to providing connectivity but also to offer personalized digital services to our customers. In terms of structure and strategy, we may need to build new capabilities, restructure our organizational hierarchies, re-invent business models and tap more complex markets.
How do you assess the market readiness for 5G deployments in Nepal? What's your strategy for 5G?
As far as 5G is concerned, it's just the question of “when” rather than “why”. Nepal will eventually have to adopt this technology. Currently, we are building our fiber infrastructure at a brisk pace, developing high capacity backbone infrastructure and nationwide tower infrastructure and we believe that this will be pivotal for our 5G deployment in future.
Most of the debate currently with operators and regulators is on the availability of spectrum for 5G, allocation modality and, most importantly, the costs associated with obtaining them. We are exploring our future strategy, value segments and the opportunities that can be harnessed through 5G via a separate dedicated study committee for 5G.
I firmly believe that 5G as a technology will evolve as the time progresses and we do need to collaborate with ecosystem players to provide our services and reap the maximum benefits out of it. The current 4G LTE services across the nation will also make the market foundation for the 5G services.
With respect to preparing for 5G, where are you now on the journey of core network virtualization?
The current ZTE-made LTE core has virtualization features and is expected to be upgraded to higher version to provide 5G capability. We have a long-term relationship with ZTE and we will have every opportunity for knowledge and experience sharing.
What has been and will continue to be the key to Nepal Telecom's success?
One of the biggest strengths is our people. Nepal Telecom's employees are highly qualified and bring in a wealth of experience in several domains with adequate international exposures combined with a positive attitude. Nobody can undermine the expertise that we carry in terms of technology. Our people will continue to remain our pillar of strength.
In addition to this, we have always been an important part of the government's vision of connecting the unconnected. As a result, we have gained an enormous amount of faith and loyalty from our customers over the years. Also, our transparent billing systems, multiple services, and nationwide presence have contributed significantly to our success till date.
What are your primary objectives for the next three years? What do you think you want to be providing to your customers?
Our main growth engine for the next three years will be data and we will be investing a significant amount of our capital budget in strengthening our data infrastructure and providing new services and applications for our valued customers at affordable rates. Also, our main strategy will be geared to regain the top position in both wired and wireless broadband services. With the commercialization of mobile financial services, we are expecting that we will be the leader in digital payment and help the country in digital transformation. Enhancing customer care, service automation for better customer support will be our primary objectives.