Financial Institutions in Nepal Past, Present and the Future

Dhananjay K Shrivastav
Ace Institute of Management
EMBA, 2nd Semester, Spring 2013

Telecommunications is emerging as vital infrastructure. All economic and social sectors, one
way or another, depend on telecommunications for good performance. It is no doubt to say
that countries that lack access to modern telecommunications facilities today cannot
effectively participate in the global economy. It plays an important role in developing human
resources, in providing health services and in the efficiency of government administration as
well. Keeping in harmony with the currently evolving new technologies, it is felt that the
resources and efforts of the government alone cannot fulfill the gradually Increasing demand
of the telecommunication services in a competitive environment. With this concept, using
liberalization policy and involving the private sector in a competitive environment for the
development and expansion of telecommunication sector in Nepal, The decision of His
Majesty's Government of Nepal on December 25, 1995 paved the way for the involvement of
the private sector in the development of the telecommunication services.
Spice Nepal Private Ltd. was established in 2004 as the first private mobile operator in Nepal
and launched its services under Mero Mobile brand in 2005.Ncell (then Mero Mobile) broke
the monopoly held by the state-owned Nepal Telecom, by building a new ground in mobile
telephony services. Ncell has adopted the approach that mobile communication is not
a luxury but a necessity. Ncell was the first in the market to launch a single rate tariff for all
everywhere in Nepal. Ncell was also the first to introduce the Nepalese to a bundled offer
(handset + tariff), and the latest smart phone solutions.

Fig1:Subcribers trends for NTC and Ncell.

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Fig2:Mobile penetration.
Since Ncell is cellular service provider, it utilizes the technology of different forms to provide
the world class service to customers. Ncell has become number one telecom company in
Nepal beating state owned Nepal Telecom in subscriber base using latest & sophisticated
technologies. It has set a benchmark with the competitor for leading in technology.
Telecommunication industry is based on technology and the growth of the industry depends
upon the wise use of the technologies. The use of technology here doesnt mean that new
technologies shall be used when it comes; rather the business model would drive the
technology to be adapted by company or end users.As shown in figure there during july,2006
the mobile penetration was very low around 2.92% and the Nepal Telecom was market leader
with subscribers of around 0.6milions where as Ncell had 0.1milions subscribers. the
situation rapidly changed and mobile penetration has reached to 76.8% and market leader is
Ncell now with subscribers around 11Milions where as Nepal telecom has around 9milions
subscribers. At this time in the local market, we see the data demand is really very high.
People want to always be connected on their finger tips with their friends, family, coworkers
and employers. So, data demand is everywhere all the time which is referred to as mobile
broadband. In the economic context as well, it is quite important for the citizens should use
the technology optimally to reduce the digital gap which can boost up the economy and make
the efficient use of the money. Hence competition in data services are still in growing phase
and sooner it will invite the next technology called 4G.
The functional units in Ncell use different kind of systems/technologies. Each unit
responsible for reporting the performance of their activities and responsible key areas in
weekly basis. For this, the reports are customized for the management and employee as
finance, non-finance, technical, non technical etc. It helps them to analyze and go ahead with
some plans if needed. There are plenty of the campaigns that are going each year and
campaign management system helps to analyze and report the performance of each
campaign. For the campaigns customer detailed data is very important to know their
behavior and profiles. It would change the model of campaigns. To do all these, data
warehouse is most. I suspect, the competitor have data warehousing in optimal condition
since the campaigns they run is simply not adding much innovations. They use flat

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campaigns for all. Ncell is par excellent with the competitors which add competitive
advantage. File Server is one which also adds competitive advantage by storing the data and
files properly providing large storage area.
The supporting activities that Ncell performs to assist the primary activities to gain the
competitive advantage in the local market are classified into procurement, technology
management, human resource management and Infrastructure. In the procurement activities,
annually millions of dollars are expended for the demands from the multi functional units. It
is then transformed into finished product or services. Procurement adds value by the
acquisition of appropriate goods or services at the best price, at the right time, and in the
desired place with the desired quality and quantity. Technology Management is very
important in todays technological driven environment. Technology can be used in production
to reduce cost, to develop new products, increase customer service facility, build up cost
effective process, etc. It supports the value chain activities such as research and development,
process automation, process design, etc. Similarly, Human Resource Management is the key
roles of HR are to support the attainment of the overall strategic business plan and the
objectives. As a strategic business partner HR designs the work positions by hiring,
recognition, reward, appraisal systems, carrier planning, and employee development. They
act as an advocate of the employees to motivate them and create a happy working
environment. For the organizational changing situation, HR executes the strategic needs of
the organization with minimum employee dissatisfaction and resistance to change.
Infrastructure includes the planning management, legal framework, financing, accounting,
public affairs, quality management, general management, etc. These are required to perform
the value added activities efficiently to drive the organization forward to meet the strategic
plan and the objectives.

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References:
[1].http://www.nta.gov.np/en/mis-reports-en
[2].http://www.nepalitelecom.com/2012/04/telecommunication-in-nepal-milestones.html

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