Nepal Monitor: The National Online Journal

By Vishwa Nath Goel

Needless to say Nepal Telecom is going through the most challenging time since its inception. Two more competitors have been added to existing two, so there are four competitors knocking NT from four corners. Looking at the market growth and network expansion plan of competitors the day is not far away when NT will lose its dominant market position. Hence it is high time that NT formulates strategy to face the challenge for retaining its No.1 position. Following are the issues NT should decide and implement. The sooner it goes into action the longer it will live.

1. Customer care: Real competition is in the customer care areas. It goes without saying that NT's customer relation is the poorest among all existing operators. There is a growing tendency in NT employees to work less & less and seek more & more benefits. It goes without comment that it is against the principle of survival. Here the truth of life is that "one cannot get more then it produces." The areas where NT deals with customer/people are badly affected due to the 'don't bother' attitude of NT employees.

One glaring example is service of '1498'.This is the number where 3.2 million GSM mobile customers are supposed to get response about their queries/complaints regarding mobile telephone service. One will be surprised to know the quality of service of 1498. When you want service through this number, you will be lucky if you are able to get access to this number, even if you get access the response is non polite, non professional, rude & incomplete. The response is only 3%, which means that out of 100 only 3 people get answer to their quarries.

What is the use of running customer care where only 3% get response and 97% don't?

Conclusion: Either run it properly or close it.

2. Price war: Many people feel that reducing price retains customers. I feel customers are not retained only by price, it is quality of service that is the most important. What is the value of low price if you cannot listen what the other person is telling. Reducing price is making business non-profitable thereby reducing the capability of origination to improve Quality of Service.

Conclusion: It is not the price; it is quality that retains customers.

3. Pay as you use, pay when you like to pay: Eighty percent of NT’s fixed line customers pay less then Rs. 300/ per month. Out of 600,000 fixed line customers 480,000 travel to the counter of Nepal Telecom to pay their monthly bills. The cost of transportation may itself run in hundreds. On the other side, more than thousands of NT staff members are employed in collecting or processing the bills.

To save both side from this unnecessary trouble, just think if NT introduces a scheme in which customers can pay as the prepaid customers of mobile. He/she can buy the recharge coupon from nearby stores and recharge his/her phone as per his/her uses and as per his/her choice of time and convenience. NT cannot only save work hours in thousands of its staff members involved in bill collection, it can also get three months worth of revenue in advance from customers.

Another case is postpaid mobile subscribers. Out of 3.2 million GSM Mobile customers only 100,000 are postpaid. Many of them live in places where even if there is NT counter, it does not have payment facility for post paid mobile. Just think if these customers are allowed to pay in prepaid mode, how comfortable will they feel?

Conclusion: Technology is available to do this, why don't we do this?

4. Mobile money transfer:
Guess what percentage of people has access to bank? What percentage of people has a bank account? You will be surprised only 5-7% our population has a bank account. How can the economy of people in rural areas improve if they don't have access to bank accounts? How can they save money and then start borrowing when needed? In absence of bank facility, they enter into vicious circles of borrowing and spending and remain poor throughout their life.

Mobile Telephone can help these people to walk out of poverty trap. They can save money in an account through mobile telephone. The mobile number will be linked to individual bank account in a certain bank. The owner does not need to come to bank for opening the bank account. He/she can deposit, withdraw, transfer and make payment using his/her mobile telephone.

Mobile money will greatly help poor people in the rural areas, who have no access to a bank account, thus helping to enhance their standard of living.

Conclusion: Let us start MMT without delay.

5. Prescriptions for NT:
i) Out source: Outsourcing should be done in all those areas for which manpower is available in the country, like inquiry service, cash collection, driver’s job, letter distribution, service distribution like SIM/RUIM, recharge coupons. Even network maintenance jobs like BTS maintenance, cable network maintenance, cable network pulling etc. should be out-sourced. It will be cheaper, predictable and measurable.

ii) Infrastructure sharing: Let us open a joint venture infrastructure company in collaboration with other operators in the country. Let all the partners put their present infrastructures like Towers, Battery, Air-conditioning, Generators into this company. This new company will put new towers as per the requirement of operators and maintain the old ones. This will not only make our services cheaper but also save cities from environmental issues. If we don't go for this, the day is not far when all the houses in metropolitan area will have towers and power supply will be a big issue.

iii) Fund Management: NT has NRs. 25 billion in reserve and it generates around Rs. 5 billion as surplus each year. It is not able to invest the 5 billion it generates as surplus each year. Hence the reserve amount of NT is growing each year. NT has invested this money with Nepal Rastra Bank’s Bonds and has deposited with other commercial bank. It earns an interest of 9-10% on its investment.

Many infrastructure projects like road, electricity, petroleum, civil aviation sector are suffering from the lack of capital. The country is acutely suffering from shortage of power, crippling the telecom networks and bringing the life of people to hardship. Industries are also suffering in a big way.

It was with this consideration that I purposed that NT should invest in Hydropower. Discussion was held regarding upper Tamakoshi and Trisuli III Hydro electric project. Now, as per information, NT has agreed to invest NRs. 6.6 billion in the Tamakoshi HEP. It will get an interest on 6.0 billion and 0.6 billion is as equity. Let us see the return NT will get on this module.

Presuming interest of 10% on 6.0 billion and return of 25% on 0.6 billion, the net return on investment will be 0.60+0.15= 0.75 billion or 11.36%, which is really a poor rate of return considering the a) Poor financial position of NEA, b) Poor management capability of NEA, c) Likely delay in implementation of the project due to different factors. I think we need to reconsider this investment.

It seems necessary that NT develops criteria for such investment like follows.
1. Put money in project which benefits general Nepali people.
2. Put money in project of national need and importance.
3. Put money in project where rate of return is more or equal to ROR as investment in Telecommunication.
4. Put money in projects which are preferably owned by government. It helps NT to decide investment faster and be less controversial.
5. Put money in a project which will enhance NT's image as agency for national development.

Conclusion: Major like above has been long due in NT and needs action than discussion.

Mr. Goel is a manager with Nepal Telecom. This article is adapted from Telecom Smarika (Sixth Anniversary Souvenir 2010). The edited is edited for clarity. Nepal Telecom celebrated its 6th Anniversary on Feb 5, 2010.

###