Colombo, Sri Lanka, 25-26 October 1999 1 UNCTAD Regional Roundtable on Electronic Commerce and Development, Colombo (Sri Lanka) 25-27 October 1999 LDCs

Colombo, Sri Lanka, 25-26 October 1999

1

UNCTAD Regional Roundtable on UNCTAD Regional Roundtable on Electronic Commerce and Electronic Commerce and

Development,Development,Colombo (Sri Lanka) 25-27 October 1999Colombo (Sri Lanka) 25-27 October 1999

LDCs and e-commerceLDCs and e-commerce

The example of NepalThe example of Nepal

Shashank Kansal,Shashank Kansal,President/CEO - Digital Telecom InternationalPresident/CEO - Digital Telecom International

Secretary General - Asia Pacific Trade Point Forum (APTPF)Secretary General - Asia Pacific Trade Point Forum (APTPF)Voice:977-98102-0076, Fax:9771-529403 GPO Box:10528, Voice:977-98102-0076, Fax:9771-529403 GPO Box:10528,

Kathmandu, Nepal.Kathmandu, Nepal.

http:www.nepalonline.net [email protected]:www.nepalonline.net [email protected]


2

19991999 VSAT International Connectivity AllowedVSAT International Connectivity Allowed UNLIMITED Bandwidth availableUNLIMITED Bandwidth available Prices Most Competitive in South-Asia Prices Most Competitive in South-Asia

(US$30 per month/unlimited access vs (US$30 per month/unlimited access vs previous rates of US$2/hour) previous rates of US$2/hour)

New Telecom Opportunities like GSM and New Telecom Opportunities like GSM and Paging start operationsPaging start operations

Government takes initiatives to bring the Government takes initiatives to bring the IT on the forefront for Development.IT on the forefront for Development.


3

Advantages and LimitationsAdvantages and Limitations Price reduction or AccessPrice reduction or Access Hosting content in Nepal with huge capacity Hosting content in Nepal with huge capacity

availability.availability. More POPs around the country - Nation Wide More POPs around the country - Nation Wide

E-Commerce initiative. E-Commerce initiative. Number of users likely to more than trebleNumber of users likely to more than treble WebSite creations!WebSite creations! Online Payment via Cyber Cash, Credit Card etc. Online Payment via Cyber Cash, Credit Card etc.

(Offshore)(Offshore) Government slow on Law, Banking, Infrastructure. Government slow on Law, Banking, Infrastructure. Call Centers, Unique in World !!!Call Centers, Unique in World !!!


4

1998 “The Year of 1998 “The Year of Convergence”Convergence”

More POPs outside KathmanduMore POPs outside Kathmandu No bandwidth expansion (via NTC) as No bandwidth expansion (via NTC) as

market expects NTA to open up the market expects NTA to open up the skies - VSAT. Service is affected.skies - VSAT. Service is affected.

Customer support improves as market Customer support improves as market focus shifts to quality to customer focus shifts to quality to customer support and response. support and response.

Several new businesses get new Several new businesses get new opportunity with internet.opportunity with internet.


5

1996-19971996-1997 Three private ISPs in the countryThree private ISPs in the country Domain services available freeDomain services available free NGO, INGO, Govt. Organizations, Travel Agencies, NGO, INGO, Govt. Organizations, Travel Agencies,

Small Organizations, Corporate, Consulates, Small Organizations, Corporate, Consulates, Expatriates etc start using the Email and Internet Expatriates etc start using the Email and Internet most due to expensive Telecom alternative!most due to expensive Telecom alternative!

First low speed digital link to Singapore First low speed digital link to Singapore Telecom established in 1995, subsequently Telecom established in 1995, subsequently upgrades to higher speed voice-grade lease upgrades to higher speed voice-grade lease circuit.circuit.

Price drop from Rs. 25/Kb to Rs 10/KbPrice drop from Rs. 25/Kb to Rs 10/Kb


6

The Begining:1993-94The Begining:1993-94

Experimental (Free) email service is Experimental (Free) email service is introduced by Ronast and Private introduced by Ronast and Private Sector. Both organizations user dialup Sector. Both organizations user dialup services provided by ERNET, New Delhi. services provided by ERNET, New Delhi.

Only email services (UUCP) introduced Only email services (UUCP) introduced for low end Telecom.for low end Telecom.


7

Growth (Estimates)Growth (Estimates)

Between 1994 and 1997 email only users grows Between 1994 and 1997 email only users grows rapidly from 0 to 3,500rapidly from 0 to 3,500

1998,1999 email only users growth decreases in 1998,1999 email only users growth decreases in favor of Internet services favor of Internet services

Email users now about 10,000 accounts (actual Email users now about 10,000 accounts (actual user about 30,000)user about 30,000)

Between 1996-1998 Internet users increase from Between 1996-1998 Internet users increase from 0 to 6,000 accounts (around 12-15,000 users)0 to 6,000 accounts (around 12-15,000 users)

In 1998 growth of Internet users slows down: In 1998 growth of Internet users slows down: bandwidth constraint, high prices deter new bandwidth constraint, high prices deter new users.users.


8

Growth & PricesGrowth & Prices

Most of these figures likely to more than treble Most of these figures likely to more than treble between June 1999 and June 2000 due to VSAT between June 1999 and June 2000 due to VSAT connectivity:connectivity:– Lower costsLower costs– More bandwidthMore bandwidth– More POPsMore POPs– Email 15,000 email accounts (50,000 users)Email 15,000 email accounts (50,000 users)– Internet 20,000 PPP accounts (100,000 Internet 20,000 PPP accounts (100,000

users)users)


9

BandwidthBandwidth

Key Issue for E-CommerceKey Issue for E-Commerce VSAT is the best AlternativeVSAT is the best Alternative 1999: major change, Internet bandwidth 1999: major change, Internet bandwidth

increased over 5MB, VSAT. increased over 5MB, VSAT. 2000-01: international bandwidth 2000-01: international bandwidth

expect to exceed 15MBexpect to exceed 15MB National bandwidth: East West Fiber National bandwidth: East West Fiber

HighwayHighway


10

OwnershipOwnership

ISPs - all private ownership except NTC ISPs - all private ownership except NTC and IOE, new entrantsand IOE, new entrants

Number of ISPs increase from previous Number of ISPs increase from previous 3 to 7-10 before the end of 19993 to 7-10 before the end of 1999

NTC (a 100% government company, NTC (a 100% government company, thus far) likely to provide access thus far) likely to provide access services in 1999services in 1999

IT companies start offering commercial IT companies start offering commercial services over the web.services over the web.


11

Role of government (NTA)Role of government (NTA)

Liberal policiesLiberal policies Best Telco infrastructure in the regionBest Telco infrastructure in the region Incentive/subsidies to provide access to Incentive/subsidies to provide access to

rural areas, poor and under privilegedrural areas, poor and under privileged Nepal better off than neighbors Nepal better off than neighbors

including India.including India. Cyber Law, IT-PolicyCyber Law, IT-Policy Education and Computer AwarenessEducation and Computer Awareness


12

RegulationRegulation

Internet regulations on the whole are Internet regulations on the whole are progressive but are quite stringentprogressive but are quite stringent

Access to content made the Access to content made the responsibility of ISP and end-usersresponsibility of ISP and end-users

Levies of multiple taxes could dissuade Levies of multiple taxes could dissuade many potential usersmany potential users

4 + 2 % tax on “revenues”4 + 2 % tax on “revenues”


13

Manpower availability and Manpower availability and trainingtraining

Most of the ISPs have used local Most of the ISPs have used local computer and communications engineers computer and communications engineers and have been trained in-house and have been trained in-house

Some ISP consultancy services Some ISP consultancy services purchased from third countrypurchased from third country

Trained manpower is not expected to be Trained manpower is not expected to be a major hurdle in ISP infrastructurea major hurdle in ISP infrastructure

End user training is widely available from End user training is widely available from ISPs and computer schools.ISPs and computer schools.


14

Future - E-CommerceFuture - E-Commerce

International connectivity - VSAT and International connectivity - VSAT and Fiber OpticsFiber Optics

Local content in international languages Local content in international languages and vice versaand vice versa

Web technology developmentWeb technology development Private and International Banks - swift, Private and International Banks - swift,

credit cards, cirrus.credit cards, cirrus. E-COMMERCE for SME and SMIE-COMMERCE for SME and SMI Virtual GalleriesVirtual Galleries


15

PartnershipsPartnerships Partnerships are the futurePartnerships are the future Governments should identify the Governments should identify the

Private Sector ImportancePrivate Sector Importance Geo Political Boundaries disappearGeo Political Boundaries disappear

–It is Now OR NEVERIt is Now OR NEVER Have a Great Electronic Have a Great Electronic

Information FutureInformation Future

Documents

Colombo, Sri Lanka, 25-26 October 1999 1 UNCTAD Regional Roundtable on Electronic Commerce and Development, Colombo (Sri Lanka) 25-27 October 1999 LDCs