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Spectrum issues in Nepal P. Khanal Nepal Telecommunications Authority pkhanal@nta.np

Spectrum issues in Nepal P. Khanal Nepal Telecommunications Authority pkhanal@nta.gov.np Director Admin,HR, Finance and Rural telecom Africa Asia Regulatory conference Colombo, Sri-Lanka.

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Spectrum issues in Nepal P. Khanal Nepal Telecommunications Authority pkhanal@nta.np

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  1. Spectrum issues in Nepal P. Khanal Nepal Telecommunications Authority pkhanal@nta.gov.np Director Admin,HR, Finance and Rural telecom Africa Asia Regulatory conference Colombo, Sri-Lanka

  2. Over view of the country and telecom sector in brief.Spectrum allocation legislation and statistics of allocation of Spectrum in Nepal.Public Account Committee (PAC) investigation and its recommendation on Spectrum matter.

  3. NEPAL India China India India Location: 260 22' to 300 27' N Latitude 800 4' to 880 12' E Longitude Area: 147,181 Sq Kilometer Length: 885 Kms east to west Breadth: 145 to 241 Kms north to south Population: About 26.6 Millions

  4. Geographical Divisions: The Himalayan Region –Altitude ranges from 5000m to 8848m –Composed of Himalayas and snowy mountains –Covers 15% of total area The Hilly Region –Altitude ranges from 300m to 5000m –Consists of hills, green woods and fertile valleys –Covers 68% of Total Area The Terai (Plain) Region –Altitude ranges from 300m or less –Rich in agricultural production –Covers 17% of total area Administrative Divisions: –5 Development Regions –14 Zones –75 Districts –58 Municipalities & 3914 Village Dev. Committees

  5. Base camp of Mount Everest Namchebazar

  6. Telecommunications Sector at a glance MOIC Telecom ACT Telecom Regulation Telecom Policy NTA Telecom Sector

  7. Nepal Telecom Fixed, Cellular Mobile based on GSM and CDMA, services throughout the country. Major Telecommunications services in Nepal Ncell Pvt. Ltd. Cellular Mobile Service based on GSM technology. United Telecom Ltd.. Basic service WiLL, using CDMA technology. STM Telecom STM is providing VSAT based PCO in EDR. Nepal Satellite Nepal Satellite has started its service in the MWDR Smart Tel has started its services in the remote VDCs of the all development regions other than the EDR. Smart Tel Pvt. Ltd

  8. The overall telecom Scenario and telecom penetration Service Tele-Density • Services Penetration Rate • Fixed 3.17% • Mobile 50.16% • Others (LM, GMPCS) 3.13% • Total 56.46% Note: Projected Population for 2011 is 26,620,809 (Source : cbs.gov.np) Source: MIS NTA

  9. Following are the allocated Radio spectrum band to Nepal by ITU

  10. Apex entity • Radio Frequency Policy Determination Committee (RFPDC) • The committee is chaired by Minister of information and Communications • and the member s of committee are as follows: - • Minister or Minister of State,Informationand Communications – Chairman • (b) Secretary, Ministry of Home – Member • (c) Secretary, Ministry of Defense – Member • (d) Secretary, Ministry of Tourism and Civil Aviation – Member • (e) Secretary, Ministry of Information and Communications – Member • (f) Chairman, Nepal Telecommunications Authority – Member • (g) At least Gazetted first class or expert Officer equivalent there to designated by Nepal Government - Member - Secretary Spectrum allocation system in Nepalese

  11. To determine the policy relating to radio frequency. • (b) To fix and allocate the radio frequency for different services . • (c) To determine the pricing policy of radio frequency. • (d) To determine the policy for international and multi purpose coordination of radio frequency. • (3) Other functions, duties and powers and procedures relating to the meeting of the committee shall be as prescribed. Functions, duties of the committee

  12. The Committee shall fix and allocate radio frequency for different services, subject to the frequency allocated by the International Telecommunications Union (ITU).  It shall be the function of the Ministry to make coordination in consonance with the policy on international and multipurpose coordination of radio frequency formulated by the Committee. NTA’s Responsibility NTA shall carry out the act of prescribing and distributing the frequency to be used for the telecommunications service subject to the frequency fixed and allocated by the RFPDC. Mode and Procedure of Fixing and Allocating/ Distributing Radio Frequency

  13. The Authority shall prescribe the terms to be observed by the Licensee while using the frequency in operating the telecommunications service. The Authority shall have the powers to inquire and monitor as to whether the Licensee has used the frequency in consonance with the terms prescribe under telecom rule. while conducting inquiry or monitoring ,if the Licensee has not used the frequency in consonance with the terms, the Authority shall provide a reasonable period of time as well as an opportunity to the Licensee to use the frequency in accordance with the terms. If the Licensee fails to use the frequency in consonance with the terms even within the period of time so provided, the Authority may prohibit the frequency used by him. Prescription of terms while distributing frequency :

  14. Provision of telecom Policy 2004 regarding spectrum fees The License and Radio Spectrum fee including other fees shall be collected only for sufficiently covering the overhead (Operation) cost of the body working thereof. Payment of Fees : The Licensee shall have to pay the fees while using the frequency prescribed by the Committee in connection with the operation of the telecommunications service. NTA shall have to deposit the fees received above to Nepal Government.

  15. Decision of RFPDC for the GSM, CDMA frequency fee in 2002 was as follows: GSM/CDMA Cellular Mobile System fee Radio Frequency Fee = C ∑ No. of pair of spot frequency for station n. n =1, 2, 3,……… Where, n is any integer subjected to no. of Fixed station. C is a fixed number in accordance with Appendix 7,6 (b) 4 of the Radio Communications (License) regulation, 2049. This constant C is amendable as per the clause 24 of the above mentioned Regulation by the Ministry of Information and Communications. The value of C is currently fixed at Rs. 6,000.00 (Six Thousand) Rupees. Initial spectrum fees

  16. NTA’s Recommendation to the govt. to formulate new pricing policy on spectrum • With consultation with the international experts NTA requested govt. to formulate new frequency pricing policy in 2008 • The main features in the recommendations were: • Proper utilization of the scarce resources. • The recommendation was to encourage licensee to use spectrum to fulfill their actual needs only. • Provision to discouraged to hold spectrum . (More Charge ) • To contribute govt . Revenue as well

  17. Assignment of spectrum After above recommendation, meeting of the RFPDC could not arranged for two years i.e. up to 2010 due to various region. In the absence of the committee ,Minister and MOIC instructed NTA to assign 3G spectrum to the incumbent operator , subject to pay fees from the initial phase of the uses when RFPDC decides on it. And to provide equal level playing field ,NTA it self assigned 3G frequency under above condition to the private telecom operators as well.

  18. Frequency allocation status in Nepal

  19. With close consultation with the experts and stakeholder NTA again requested govt. to formulate new frequency pricing policy again in 2010. and then RFPDC approved new pricing policy in 2011 (except 3G ) • Spectrum Assignment Criteria for GSM and CDMA Annex-1 • Bandwidth for Initial Assignment NTA’s Recommendation to the govt. to formulate new pricing policy on spectrum contd…….

  20. B. Bandwidth Criteria for GSM and CDMASubscriber or Revenue Bases criteria (whichever is selected by the licensee) satisfies for required spectral Bandwidth) for Assignment of GSM and CDMA spectrum which will be followed as a measure to determine necessary bandwidth for the provision of serviceteria for GSM

  21. Criteria for CDMA** For Rural Operators, based on coverage attained, additional bandwidth may be assigned as refarming progresses. If spectrum in addition to the spectrum in one band is assigned first and additional bandwidth is to be provided in another band, for the initial additional spectrum 2x4.4 MHz will be provided.NoteBandwidth shown in the table is the sum total of bandwidths assigned in different frequency ranges for the same type of services (GSM or CDMA). Subscriber Base: These are the figures of active subscribers (VLR) averaged over a month.Revenue Base: Audited Annual RevenueThe spectrum assignment would be based on carrier BW (i.e 2x1.25 MHz for CDMA and 2x 0.2 MHz for GSM) subject to availability of spectrum. GSM bandwidth taken as next higher multiple of 2 x 200 KHz (one carrier), and CDMA of 2 x 1.25MHz (one carrier)For example calculation of required bandwidth in GSM between 2x12 MHz and 2x15 MHz may be done as follows:Let the subscriber number be: 3,700,000. The essential bandwidth is: 2x[12+(15-12)/(4,500-3,000)*(3,700-3,000)] = 2 x 13.4 MHz =26.8 MHz

  22. Formula-1 annex-2 (2BWL + BWU) Annual Spectrum Fee (Rs.) = [P] X [AGR] X BWT Where • P: Percent figure. The value is currently fixed 0.7%. Radio Frequency Policy Determination Committee may review the value of P as and when deemed necessary. • AGR: Annual Gross Revenue • BWL: Total Spectral Bandwidth assigned to the licensee in Lower Frequencies (e.g. CDMA800 and GSM/EGMS900) • BWU: Total Bandwidth assigned to the licensee in Higher Frequencies (e.g. CDMA1900 and GSM1800) • BWT: Total Bandwidth Assigned to the licensee = BWL +BWU

  23. Formula-2 (2BWL + BWU) Annual Spectrum Fee (Rs.) = [P] X [AGR] X + R X (BWT - BWE) X α BWT Where • P: Percent figure. The value is currently fixed 0.7%. Radio Frequency Policy Determination Committee may review the value of P as and when deemed necessary. • AGR: Annual Gross Revenue • BWE: Bandwidth Essential for the service, determined based on the Spectrum Assignment Criteria for GSM & CDMA (Annex-1, ) • Total Bandwidth is the sum of all the 2G / 2.5 G (GSM and CDMA) Bandwidth. • BWL: Total Spectral Bandwidth assigned to the licensee in Lower Frequencies (e.g. CDMA800 and GSM/EGMS900) • BWU: Total Bandwidth assigned to the licensee in Higher Frequencies (e.g. CDMA1900 and GSM1800) • BWT: Total Bandwidth Assigned to the licensee = BWL +BWU • R: Annual Rate of Spectrum Charge (Rs/MHz) for Extra Bandwidth, Currently the value of R is fixed at Rs. 7,000,000/MHz and shall increase by Rs. 25 millions every two years. • αRegional Coefficient: α = 1 as clarified overleaf in ponit 3 in page 2 of this Annex.

  24. Main feature of the pricing policy Fee for GSM and CDMA Spectrum On the basis of (bandwidth + Certain percentage of Revenue) Fee for GSM 900 and 3G Double and triple than GSM 1800 respectively Holding spectrum more than requirement Pay more fees as per formula no.2.

  25. PAC has Investigated the entire spectrum allocation processes and gave its report for the immediate implementation. Prepare transparent and scientific policy on it instead of previous one. Spectrum is scarce resources of country • Issues raise by PAC • Instruction of PAC Detail investigation should be carried out by proper authority spectrum were provided by adhock decision Operators are holding more than necessary spectrum Withdraw the more spectrum Country is loosing money Make necessary arrangements for auction

  26. Difficulties to auction the Spectrum.1. First mobile license was issued in 2000 to incumbent as per govt directives with condition to pay fees i.e. equals to the Pvt. Operator when determined by auction.2. Second mobile license was auctioned in 2004 as per telecom act. In above auction the cost of license was more than 20billion for ten years. Renewable in every five years up to 25 years.Telecom operators are asking for remove them from the potential double standard bidding .Provision of act to auction license only not spectrum.

  27. Thank you

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