Nepal ISPs Warn of Higher Internet Costs as Government Pushes Digital Expansion
Nepal's internet service providers have warned they may discontinue low-priced packages from Monday, citing rising operating costs. The warning comes as the government accelerates its digital transformation agenda, including plans to expand broadband access and introduce 5G services.
KATHMANDU, Oct 4 — Internet service providers in Nepal have warned they may discontinue low-priced internet packages from Monday, citing rising operating costs, even as the government pushes to expand affordable, high-speed broadband access under its digital transformation drive.
The Internet Service Providers Association of Nepal (ISPAN), the umbrella body representing private internet service providers, said existing low-priced, low-speed packages can no longer be sustained amid rising costs of network infrastructure and other inputs.
In a statement, ISPAN said it had been compelled to take the "harsh decision" due to rapid changes in the technology market and a sharp rise in operating costs. The association cited several factors driving up the cost of providing internet services:
- Prolonged increases in domestic prices
- The impact of tensions in West Asia on fuel costs
- A sharp rise in the price of optical fiber
- Surging prices of chipsets used in electronic devices and network infrastructure, driven by high global inflation and the rapid advancement of artificial intelligence (AI) technology
ISPAN said these pressures have made it increasingly difficult for service providers to sustain operations at existing rates.
The warning comes at a time when the government is seeking to accelerate Nepal's digital transformation and expand access to high-quality broadband internet.
The Integrated Telecommunications Policy 2026 envisions accelerating digital transformation to make daily life easier, promote inclusive economic growth and ensure equal access to digital opportunities. The policy is expected to contribute to productivity gains in sectors including industry, tourism and education.
The Nepal Telecommunications Authority (NTA) has also said it is working to expand broadband access, reduce the cost of internet services and advance the goal of a Digital Nepal. Under its plan, the regulator has targeted providing broadband internet with a minimum speed of 50 Mbps to 80 percent of the population within the next five years. It also plans to facilitate commercial testing of 5G services as demand for faster and more reliable internet continues to grow.
In August, the NTA approved a new tariff structure linking internet charges directly to connection speeds — the first time a speed-based tariff system has been formally approved in Nepal. The NTA has also made it mandatory for ISPs to publish regulator-approved tariffs on their websites and to issue VAT bills to customers.
ISPAN, however, has argued that the new tariff arrangement and related requirements will place an additional financial burden on ordinary consumers and could limit their access to digital services.