Internet service providers are warning that low-priced, low-speed internet packages may no longer be sustainable amid rising operating costs. The Internet Service Providers Association of Nepal (ISPAN) has announced that such packages will no longer be available from October 5, citing increases in fuel, optical fiber, chipsets and other network infrastructure costs, as well as high inflation. Rising costs can be a legitimate reason for businesses to raise prices. Internet service providers, like other businesses, cannot be expected to operate indefinitely at rates that no longer cover their costs. ISPAN’s claims about rising input and operating costs therefore deserve serious consideration. But higher prices must be supported by transparent data, particularly when an entire industry appears to be making the same decision at the same time. The ISPAN has not clearly stated what constitutes a “low-priced, low-speed” package, which packages will be discontinued or how much the costs of providing those services have actually increased. More importantly, the decision has been announced collectively by the umbrella organization representing internet service providers. If competing companies simultaneously withdraw cheaper packages, consumers effectively lose the ability to choose a less expensive provider. This is where the issue goes beyond a simple question of whether internet prices should rise. In a competitive market, companies should be free to adjust prices according to their costs and business strategies. They should also be able to compete by offering cheaper packages, discounts and promotional plans.
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But when competitors collectively decide to remove cheaper options, the arrangement can resemble cartel behavior and weaken competition. That possibility deserves scrutiny from the regulator. The concern is particularly serious because internet service has become an essential part of everyday life. Education, employment, business, banking and government services increasingly depend on reliable internet access. The government itself is seeking to expand affordable broadband connectivity as part of its digital transformation agenda. The Integrated Telecommunications Policy 2026 aims to promote inclusive digital access, while the Nepal Telecommunications Authority (NTA) has set a target of providing broadband with a minimum speed of 50 Mbps to 80 percent of the population within five years. The timing of the ISPAN announcement is therefore important. In August, the NTA approved a new speed-based tariff structure and required internet service providers to publish regulator-approved tariffs on their websites. ISPAN, meanwhile, has argued that the new tariff arrangement and related requirements could increase the financial burden on consumers. The NTA must clarify its role in the latest development. If it has approved or otherwise facilitated changes in internet packages, it should make public the basis for that decision. If it has not, it should explain whether the collective withdrawal of cheaper packages is consistent with competition and consumer-protection rules. The relevant authorities should also examine whether coordinated action by ISPs amounts to cartelization.
This does not mean assuming that service providers have acted improperly. Rather, it means determining whether the market is functioning competitively and whether consumers are being deprived of meaningful choices. ISPs, for their part, should provide credible information about the costs that have increased and explain how those increases have affected different packages. Transparency would strengthen their case if the cost pressures are genuine. Existing customers should also be protected from unilateral changes during the term of their contracts. Where consumers have entered into agreements under specific prices and conditions, those terms should remain valid until the contracts expire, unless there is a clear legal basis for changing them. Nepal needs both financially viable internet providers and affordable internet access. These objectives are not necessarily contradictory. But achieving them requires a transparent and competitive market, not collective decisions that leave consumers with fewer choices. If the service providers’ cost concerns are genuine, an open examination of the data will establish that fact and help justify reasonable price adjustments. If they are not, regulatory scrutiny will protect consumers from possible collusion. Either way, transparency is the best way to resolve the growing suspicion surrounding the proposed withdrawal of cheaper internet packages.
