Chapter-I

Introduction

1.1 Company’s profile:

Nepal Doorsanchar Company Ltd, popularly known as Nepal Telecom is a state owned
(public) telecommunication service provider in Nepal with 91.49% of the government
share. The company was a monopoly until 2003, when the first private sector operator
UTL started providing basic telephony services. The central office of Nepal Telecom is
located at Bhadrakali Plaza, Kathmandu. It has branches, exchanges and offer office in
184 locations within the country.

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It is the sole provider of the fixed lines, ISDN and leased-line services in Nepal. Following
the entry of Ncell (previously called Mero Mobile) into Nepal’s telecommunications
industry in 2005, it is no longer the only provider of GSM mobile service. With more
than 5,400 employees, it is one of the largest corporations of Nepal. It has a total of 262
telephone exchanges in various parts of the country serving 603,291 PSTN lines, more
than 5 million GSM cellular phones and more than a million CDMA phone line as of July
2011. According to the recent data, there are about 10 million users of Nepal Telecom
including all those of fixed landline, GSM mobile, CDMA and internet service. Nepal
Telecom Launched 4G LTE Service on 1 January 2017. It is the first operator to provide
4G LTE service in Nepal on technology Neutral frequency band of 1800 MHZ as standard
for 4G in Nepal.

1.2 Objective

1.2.1 Mission

 Nepal Telecom, as a progressive, customer spirited and consumer responsive

entity, is committed to provide nation-wide reliable telecommunication services
to serve as an impetus to the social, political and economic development of the
country.
 Create optimum conditions for the development of telecommunication sector in
Nepal.
 Healthy competition among service providers and the nation in its drive for socio-
economic advancement through efficient private sector participation.

1.2.2 Vision

 NT vision is to remain a market leader in information and technology sector in

the country while also extending reliable and cost effective services to all.
 Regulate acceptance quality of telecommunications services of all types making
them affordable and accessible to all for country’s overall development.

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1.2.3 Goal

 NT goal is to provide cost effective telecommunication services to every nook and

corner of the country.

1.3 Product and services:

Nepal Telecom is the key market player as it holds about 60.30% of totals no. mobile
phones and 91 % of total no of Fixed Telephones. (NTC-MIS-2067, Aswin). It has 221
Public Switch Telephone Network (PSTN) exchanges in 72 districts and has covered all
2915 VDC with Basic Telephone service. It offers various products like Basic telephone,
Mobile telephone, Internet, ISDN, PSTN, Leased line, CDMA phone, sky data card, etc. It
has starred SIP telephony service for the Nepalese lying beyond the country to call
Nepal from round the world in its own tariff through internet.

1.4 Objective of the Study:

Objectives of the study are guidelines by which the study can be conducted in a
systematic manner. The main objective is to assess the strengths and weakness of
Nepal Telecom. The specific objectives are:

To analyze the contribution of Nepal Telecom in total revenue of government of Nepal

as a largest tax payer of a nation.
To examine financial position of the company.

1.5 Research methodology:

The first step in preparation of this report is to design the framework of the research.
The task begins with the collection of necessary data and information concerning the
study. The data and information collected has been studied carefully and presented
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them systematically and get them analyzed so as to meet the objective of the report. All
data provided has been thoroughly studied and then search design was planned.

1.5.1 Source of data collection:

Data are collected both from primary and secondary sources from the organization.

1.5.1.1 Primary data: The data collected for the very first time by observation, discussion
and interviewing Mr. Prakash Pokhrel, senior assistance, Tax-Vat section at NTC’s central
office Bhadrakali.

1.5.1.2 Secondary data: The data were collected from various booklets, pamphlets,
magazines and websites and reports submitted by seniors and colleagues to the SMART
team during SMART report making and presentation.

1.6 Limitation

The time to complete this report was very limited.

Group coordination became a great limitation.
As it was our first financials study of an organization, how far we did too but we were
unable to cover all financial information.
We were unable to interview top managers of NTC.
Due to the secrecy of the performance evaluation, the exact data is not available.
Some of the information was extracted from the website, magazines so that data may
not be accurate and updated.

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Chapter-II

Analysis and Interpretation

2.1 Sales and Services

The main services provided by the communication companies categorized and described
as follows:

2.1.1 PSTN

2.1.1.1Public switch telephone network (PSTN): PSTN is a wired telephony service where
a wire in the field of Telecommunications, Nepal Telecom has been the trusted partner
of the people of Nepal since 2032. In order to make life of a Nepali easier, Nepal
Telecom makes continuous effort to introduce the latest technology of communications.
As always, Nepal Telecom is devoted towards our customer satisfaction and national
development with all communicational prospect and technologies.

2.1.1.2 ADSL (Asymmetric direct subscriber line): It is the broad band internet service
provided by Nepal telecom where a single PSTN line is capable of providing the internet
and voice data at a time.

2.1.1.3 Dial-Up: Dial-Up is the narrow band internet service where a modem is to be
connected to the computer. Laptop computer is unable of using dial-up connection.
Using dial-up only one task can be done.

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2.1.2 GSM

2.1.2.1 3G Service (WCDMA Service):To fulfill the ever growing demands and to browse
and access the web pages like video based programs (Live TV browsing) NT installed
WCDMA based 3G system which offers 384 kbps of downloading and 64kbps of
uploading data speed. This 3G 1X (Third Generation Technology) allows the subscribers
to have the instant data transfer/connectivity with high speeds up. This technology
enables easier/smooth migration to other higher EVDO/EVDV systems (i.e. data only
and /or data with voice systems).

2.1.2.2 GPRS (General packet radio service): It is the mobile internet service provided by
NTC and is most famous amongst the users. It is the cheapest internet charge amongst
the service providers. The charge costs 15paisa per 100kb data transfer.

2.1.2.3 Post-paid and Pre-Paid service: This is the service where a GSM user can switch
into a prepaid and postpaid tariff.

2.1.2.4 WiMAX service: Nepal Telecom (NT) launched the 4G WiMAX IEEE 802.16e
service first time in Nepal. This service is available throughout the country.
WiMAX enables broadband wireless anytime; anywhere using any WiMAX enabled
devices, whether it is a laptop, desktop modem, digital phone or even a game device.
Mobile WiMAX creates a seamless broadband environment at home, in the office and
on the move.

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2.1.3 CDMA Service

2.1.3.1 CDMA phone: It is the service provided by NTC where the priority is given to the
remote costumers. The foremost application of CDMA is the digital cellular phone
technology from QUALCOMM that operates in the 800MHz band and 1.9GHz PCS band.
CDMA phones are noted for their call quality

2.1.3.2 Sky Data Card: It is the volume based internet service. It is focused for the
researchers and visitors exploring new places and connecting from there.

2.1.4 SIP PPP: It is the internet phone provided by the organization where a costumer
around the globe can log in the website and can download the software and can call
Nepal as per the tariff. It requires broadband internet.

2.2 Competitors analysis

2.2.1 Spice Nepal private limited

Popularly known as “Ncell”, Spice Nepal Private Limited is the first private GSM mobile
operator in Nepal. The company was established in 2004 and commercially launched on
17th September 2005. Ncell is tied up with many different international Operators of
more than 31 countries adding up to 74 operators around the world.
The core business of SNPL is providing GSM mobile service which includes sales of sim
card and wireless voice module service. The sales of the sim card are physically by filling
up required firms through the firm’s sales counters and its local agents. Other related
services enabled through internet are GPRS (General Packet Radio Service), MMS
(Multimedia Messaging Service), PRBT (Personal Ring Back Tone), Voice call, SMS, Voice
Mail, Sms2Email, Missed Call Notification, and related value added services. Ncell
operates on dual band frequency; 900 MHz and 1800 MHz and also allows effective and
higher capacity and data transfer for services like GPRS and EDGE.

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2.2.2 United telecom limited

United Telecom Limited (UTL) is a consortium of 4 companies, who have come together
in a joint venture to explore various telecom opportunities in Nepal. UTL had
participated in the tender floated by NTA for Basic Services Based on WLL Technology
for the then Kingdom of Nepal. After going through all NTA requirements, UTL was
awarded the Letter of Intent by NTA to provide WLL based services, International Long
Distance, Domestic Long Distance and Lease Lines Services.
UTL provides mobile service based on WLL and uses CDMA technology. Both pre and
postpaid business models are offered and are provided impromptu from the firm’s sales
unit. Code Division Multiple Access (CDMA) technology is the state-of-the-art
technology offering reliable service with high-speed data capability. UTL has procured
the equipment, which offers the following features; CDMA 3G 1X (IS-2000)
With Voice, G3 Fax and Data.

2.3 Market analysis

Market analysis may take two distinct forms. In the first, it is a method used by investors
to look at the market and try to determine whether it is going up or down, in order to
make investment decisions. In the second, it is a field used by marketers to analyze the
target market of their clients and determine the best courses of action to take to
improve sales and profitability.
Market analysis as used by investors involves looking at numerical data and attempting
to discern patterns or determine probable future movement based on that data.
Investors using market analysis will look at how prices within their specific sector are
moving, how the market as a whole is tending, and what individual events might affect
the prices of stocks and commodities they are trading in. When performing a market
analysis, an investor must also consider events such as announced mergers, profit
predictions for a coming quarter, and new technological discoveries. Some investors
take a primarily mathematical approach to market analysis, looking at reams of
historical market data and crunching every number at their disposal through their own
algorithms in an attempt to predict the market’s future path. Other investors take a
more ‘gut’ approach to market analysis, relying on news sources and rumors

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surrounding companies’ activities to sketch a rough picture of possible market
tendency.

2.4 Globalization

Technology is significantly expanding in Nepal. Although we have only had mobile

technology in this country for the past 12 years, according to the Nepal Telecom (NTC),
the total number of mobile phone users in Nepal has reached 14,104,011 in January
2011. Recent statistics from the Nepal Telecom Authority (NTA) shows that more than
4.78 million mobile subscribers use Ncell where as 4.71 million uses NTC mobile
services. The International Telecom Union (ITU) estimates more than 811,780 (2.8
percent) Nepalis use the Internet (March 2011). Facebook and Twitter are already
famous social networking tools. The ITU estimates that 685,280 Nepalis use Facebook
(December 2010). That certainly shows how it is helping in globalization through the
form of internet as it helps in social and political campaigns too.

2.5 Financial: present, past and future

The company has different types of stakeholders like investors, employees, customers,
government, creditors etc. The types which show more concern to the company’s
financials are employees and investors. For employees and investors, the concern is like
how and to what extent the company will prosper in coming days. Although we cannot
predict future, but we can use our intelligence and business acumen to deal with future
if stakeholders’ concern are to be addressed properly.

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Chapter-III

Swot Analysis

3.1 Strengths
 Economies of scale: It is easier to create economies of scale thereby increasing
return on investment. Nepal Telecom market especially Kathmandu is a high-
density area, which means more population per tower. This means lower capital
expenditure cost.
 Active management team: consistent profit over a long period of time.
 Manipulate price: NTC has loyal customer base. Even though the comparative
prices are higher for its services, customer are ready to pay for it.
 Strong Brand: People have trust and are loyal towards the company. It will not
have any problem in introducing its products and technologies in the new
market.
 Sustainable business modeling: Ability to sustain itself even at worst situation
with the profit it has made over a long period of time.

3.2 Weaknesses

 Low signal strength: Large number of call drops and low quality of connection.
 Late adoption of new technology: Nepal is probably one of the last countries to
adapt new technologies .Example 3g technology, some estimate suggests that
nearly 133 countries across the world already had 3g technology and mobile
services in one form or the other.
 High overhead cost: NTC is compiled with large number of staffs. NTC is facing
hard time to recruit and assign the employees in right place in right time.
 Low quality customer care services: NT often takes days to cater customer and
their needs. Branch offices do not give priority to maintenance and customers.

3.3 OPPORTUNITIES
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  Technological advancement: The technology is getting more sophisticated and
advanced. The telecom firms can use such technology in their operation to
improve the overall performance and customer satisfaction. This provides the
firm a competitive advantage in the market.
 Expansion of territory: Still huge number of people are there who are far from
any or some of the telecommunication services.
 Creation of new business opportunities: Development of telecom industry can
result to creation of new business opportunities on other sectors such as hydro
power, man power, import, export etc.

3.4 THREATS
 Competition: Private Telecom Company entering the industry with new and
advance technology.
 Shrinking economy: Due to unhealthy and shrinking economic condition, new
telecom companies are not able to enter and the ones who are already
established are not able to expand.
 Increasing rules and regulations: Due to the frequent change in the government
and rules and regulations, telecom industry is not able to take risk and explore
new technology and market.
 Health related problems: According to studies, there are also many health related
diseases like cancer which is caused due to the excessive use of mobile phones.

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Chapter-IV

Conclusion and Recommendation

4.1 Conclusion:

Nepal Telecom, a leading company in the telecommunication sector working restlessly

for decades has been providing world class services in Nepal throughout the country
covering all the 75 districts and covering all the VDC’s. It has been providing best
services regarding telephony and internet access to the willing customers. It has
completed successful seven years of privatization. The organization is working for the
social service and has been continuing the joint venture with the traffic police and
working for the awareness in the road accidents and helping the needy during the
natural calamities. It is providing services as telephony (GSM, CDMA, PSTN, SIP PPP) and
internet as (Dial-up, ADSL,EVDO,GPRS) other entertaining services as CRBT and free ten
web sms provided. It covers about 4.5% of the national revenue and is playing major
role in the infrastructure development by revenue. It has been recognizing itself as the
largest tax payer to the government and has been leading the nation by revenue.

Being a service provider it is facing a lot of challenges. The monopoly market has no
longer existed between the organizations. The competitors are giving a heavy challenge
to them; the competitors mainly Spice Nepal working under the management of Telaia
Sonera, a famous European multinational company, united telecom (UTL), Smart
telecom and Nepal Satellite company limited are too involved in the race. Beyond these
services it has been implementing new technologies for fulfilling the desire of the
customers.

As a conclusion the services provided to the customers are satisfactory till now but a lot
of improvement and a regular cope-up is to be made to hold the existing customers and
to attract new customers from the competitive market as well.

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4.2 Recommendations

Improvement in the managerial environment: managerial environment includes the

circulation of the internal commands, decisions, it is very important to cope up with the
environment.

Improvement in the customer care: any organization, usually the service based should
always give first priority to the customers. Holding the existing customer is more
important than planning for inviting new ones because an unsatisfied customer can stop
ten new willing customers from joining the organization.

Distribution of versatile services: Customers are not properly satisfied themselves on

the provided service as they want a complete and versatile service. So Nepal telecom
should always keep flexibility of the services in majority to hold the existing customers
and to attract new customers from the competitive market.

Improvement in the decision making and policy: The decision making and policy
formulation is found to be worst in the organization. Decisions based on the
improvement and establishment of the new technology has not been properly
respected. ‘Right work in the right time’ must always be kept in the prior consideration.

Relations between the trade unions and management: the current cooperation
between the trade unions and management is quite unsatisfactory, if the organization
wants proper survival in the competitive environment it should always cope-up with the
workers unions.

References
www.ntc.net.np
www.google.com

wikepedia.org
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