KATHMANDU: State-owned Nepal Telecom (NT) has reported a steep 48.67% decline in its net profit for the third quarter of the current fiscal year.
According to its recently released financial report, the company posted a net profit of Rs 2.84 billion, down from Rs 5.54 billion in the same period last year—a loss exceeding Rs 2.69 billion.
The company attributes the decline primarily to the growing popularity of Over-the-Top (OTT) platforms like Messenger, Viber, WhatsApp, and email services, which have drastically reduced revenue from traditional voice calls and SMS.
In addition, NT made a one-time payment of Rs 20 billion to renew its GSM license, significantly affecting its liquidity. Competition from Wi-Fi-based mobile internet services offered by private ISPs has also led to a fall in mobile data usage, squeezing profits further.
The impact of OTT services has extended to international call traffic as well, causing a 22.37% (Rs 535.6 million) drop in interconnection revenue compared to the same quarter last year.
NT spokesperson Nabin Kumar Mishra stated that telecom operators in Nepal face a cumulative tax burden of 21.2%, which includes 13% VAT, 10% service charges, and a 2% ownership tax.
Additional deductions for spectrum fees, royalties, and contributions to the Rural Telecommunication Development Fund reduce profit margins significantly. After institutional taxes, NT retains only about 5% as net profit.
The financial stress isn’t limited to Nepal Telecom. Industry data show that Ncell, Nepal’s only other major telecom operator, has also experienced a consistent decline in revenue in recent years.
Combined revenue for NT and Ncell peaked at Rs 98.71 billion in fiscal year 2017/18, but dropped to Rs 73.14 billion by 2022/23—a decline of nearly 26%, according to data from the Nepal Telecommunications Authority (NTA).
