Telecommunications and Internet Regulation

Nepal liberalised telecommunications in the mid-1990s and wrote the statute that still governs the sector in 1997. The Telecommunications Act 2053 remains on the Nepal Law Commission’s list of prevailing laws. It was drafted when a telephone was a fixed line, when internet access in Nepal was a dial-up product, and when the question of who could carry data across a border had no commercial content. Everything the sector has done since has been accommodated by licence conditions, directives and byelaws issued under that Act, never by amendment to it.

Who regulates telecoms

The Ministry of Communications and Information Technology sets policy. The Nepal Telecommunications Authority regulates: it licenses operators, manages spectrum, sets quality-of-service expectations and handles consumer grievances. As at August 2026 its chairman is Bhupendra Bhandari.

The separation is cleaner on paper than in practice, because the state is also an operator. Nepal’s incumbent fixed and mobile carrier is state-owned, which makes the government policy-maker, the regulator’s appointing authority, and a shareholder in a licensee all at once. That configuration recurs across Nepal’s infrastructure sectors and produces the same tension in each: a regulator whose independence is structural rather than institutional.

Subscriptions and internet use

Two subscription series tell opposite stories.

Per 100 people	2020	2021	2022	2023	2024
Mobile cellular subscriptions	131.9	129.7	121.1	117.8	99.9
Fixed broadband subscriptions	4.4	4.3	8.5	10.7	10.1
Individuals using the internet (%)	37.0	41.0	45.5	45.8	46.3

Mobile subscriptions have fallen every year since 2020 and dropped below one per person in 2024. Fixed broadband more than doubled over the same period. Internet use by individuals rose steadily and reached 46.3%.

The mobile decline reflects the counting, not a collapse in demand. A subscription count measures active SIMs, and at 131.9 per 100 people a large share of users held two or three. Tighten registration requirements, let a second SIM stop paying for itself as data migrates to a home connection, clear dormant lines from the base, and the count falls without a single person losing service. The internet-use series, which counts people rather than lines, kept rising throughout.

Anyone reading Nepali telecom statistics should check what is being counted. A penetration figure above 100% is a SIM count. A figure in the forties is a person count. Quoting the first as evidence that Nepal is a connected market misstates the addressable population for any digital product by a factor of about two.

The tax stack on telecom

Telecom is one of the most heavily taxed consumption categories in Nepal, and the levies are stacked rather than consolidated. The FY 2083/84 position is a telecommunication service fee of 10% on amounts charged for telephone, mobile and internet services, 2% on mobile, SIM and recharge cards, and a telephone ownership fee of NPR 500 per customer, applying also on a change of ownership.

For a consumer that is a straightforward price increase. For a business it is a line item that compounds. An enterprise buying connectivity for offices, a call centre buying voice minutes, or a cloud-dependent software firm buying bandwidth pays the service fee on the whole bill. Where a Nepali service exporter competes on delivered cost against a vendor in a market that does not tax connectivity at this rate, the wedge is a real part of the cost gap.

The licensing schedules

The substance of Nepali telecom regulation lives below the Act, in the Authority’s licence categories, licence conditions, renewal terms, royalty and rural telecommunications development fund contributions, and quality-of-service directives. That is where an investor’s real questions get answered: what licence do I need, how long does it last, what does renewal cost, what happens on a change of control.

Those schedules could not be retrieved. The Authority’s licensing, statistics and MIS report pages did not resolve on repeated attempts on 26 August 2026, and no mirror of the current schedule was located. Reproducing figures from secondary summaries of unknown vintage would be worse than the gap, so none appear here. The gap is flagged.

The same caution applies to the licence renewal disputes that have shaped Nepal’s mobile market. Disagreements between the Authority and operators over renewal terms and associated liabilities have run for years and belong in any investor’s risk picture. No specific dispute, party, amount or outcome is stated here, because none could be verified from an official source.

Internet content rules

A reader looking for Nepal’s rules on what may be carried over the internet will find little in the Telecommunications Act. The operative provision sits elsewhere. Section 47 of the Electronic Transactions Act 2063 makes it an offence to publish, in electronic form, material prohibited by law, punishable by a fine of up to NPR 100,000 or imprisonment of up to five years or both. A 2006 electronic commerce statute is doing the work a content or platform law would do in most jurisdictions, and doing it through a criminal penalty rather than a takedown procedure.

For a network operator or platform, the compliance obligation therefore arrives as an instruction rather than as a published rule. Blocking and filtering directions reach service providers through the regulator, while the statutory hook sits in a criminal provision aimed at publishers. Any enterprise operating a Nepali-facing service should treat directed blocking as an operational risk with no clear appeal timetable attached.

Geography compounds this. Nepal is landlocked, and its international internet capacity reaches it by terrestrial fibre through its neighbours. Redundancy, transit pricing and the resilience of cross-border routes are commercial facts about the country rather than choices an individual operator makes. They are why latency-sensitive or bandwidth-heavy workloads are harder to justify in Kathmandu than the domestic tariff alone would suggest.

What an investor decides

Three things, none of which turn on headline penetration numbers.

Whether the licence category the business needs is currently being issued at all, and on what change-of-control conditions, since a licence that cannot be transferred is an asset that cannot be sold. Whether the regulator’s dispute record with existing licensees suggests renewal terms are negotiated or imposed. And whether the tax stack leaves a margin, given that a tenth of every rupee billed for connectivity leaves before the operator’s costs are met.

Nepal’s connectivity fundamentals have improved on the measure that counts people rather than lines, and fixed broadband growth is the more meaningful of the two subscription series for a business planning around reliable capacity. The regulatory fundamentals have not moved. A 1997 statute administered through licence conditions sets the terms of business through instruments the market cannot always read, with the state on both sides of the table.

Sources

1. दूरसञ्चार ऐन, २०५३ (Telecommunications Act, 2053) — prevailing laws index, Volume 10

   Nepal Law Commission · 1997; listed as a prevailing law as at August 2026 · Tier 1 — Primary legal instrument

   Supports: That the 1997 Act remains Nepal's governing telecommunications statute and has not been replaced.

   Accessed 26 August 2026

2. Nepal Telecommunications Authority — official site

   Nepal Telecommunications Authority · Accessed 26 August 2026 · Tier 2 — Official publication

   Supports: The Authority's existence, role, and the identity of its chairman and information officer as at August 2026.

   Accessed 26 August 2026

3. Mobile cellular subscriptions (per 100 people) — Nepal

   World Bank / International Telecommunication Union · Latest observation 2024 · Tier 3 — Multilateral institution

   Supports: Subscription figures of 131.9 (2020), 129.7 (2021), 121.1 (2022), 117.8 (2023) and 99.9 (2024) per 100 people.

   Accessed 26 August 2026

4. Fixed broadband subscriptions (per 100 people) — Nepal

   World Bank / International Telecommunication Union · Latest observation 2024 · Tier 3 — Multilateral institution

   Supports: Fixed broadband figures of 4.4 (2020), 4.3 (2021), 8.5 (2022), 10.7 (2023) and 10.1 (2024) per 100 people.

   Accessed 26 August 2026

5. Individuals using the Internet (% of population) — Nepal

   World Bank / International Telecommunication Union · Latest observation 2024 · Tier 3 — Multilateral institution

   Supports: Internet use of 37.0% (2020), 41.0% (2021), 45.5% (2022), 45.8% (2023) and 46.3% (2024).

   Accessed 26 August 2026

6. Electronic Transactions Act, 2063 — English text

   Government of Nepal; published by the Information Technology and Digital Governance Office · Authenticated 22 Mansir 2063 (8 December 2006); in force · Tier 1 — Primary legal instrument

   Supports: Section 47, publication of illegal material in electronic form, and its penalty of up to NPR 100,000 or five years' imprisonment or both.

   Accessed 26 August 2026

7. Nepal Budget 2083/84 (2026/27) — Key Highlights

   NBSM (chartered accountants, Kathmandu) · Budget presented 29 May 2026 · Tier 6 — Professional or news source

   Supports: Telecommunication service fee of 10% on telephone, mobile and internet charges; 2% on mobile, SIM and recharge cards; NPR 500 telephone ownership fee.

   Accessed 26 August 2026