US-China spat spills over into Nepal, hits 5G rollout

Nepal’s telecoms market has become the latest to be affected by the ongoing tensions between the US and China, with the rollout of 5G mobile networks in the country now apparently under threat.

5G trials in a number of Nepalese provinces have been called off because state-owned incumbent Nepal Telecom has been unable to secure a permit to import equipment from China, The Kathmandu Post reported on Wednesday. The telco aims to use equipment supplied by Huawei and ZTE for 5G.

Citing a company spokesperson, the paper reported that Nepal Telecom formally requested a licence to import equipment for the 5G trials from regulatory body the Nepal Telecommunications Authority as long ago as last November but has yet to receive a response.

The regulator denies that this is the case. Deputy director Achyuta Nand Mishra said that the Nepal Telecommunications Authority has an authorisation letter to the telco, giving it the green light to bring in the required kit. But Nepal Telecom insists that this is not the case. Spokesperson Shobhan Adhikari pointed out that if the telco had received such a letter it would have already imported the equipment it needs to push on with 5G testing.

Whatever the truth of the matter, it’s clear that the market is in turmoil, a chaotic situation that can almost certainly be traced back to the US-China trade war.

“Globally, 5G has become a matter of geopolitics and competition in data systems and security. The big players—the United States, India and China—are engaged in a fierce competition which has deadlocked 5G trials in Nepal,” the press report quoted foreign policy expert Vijay Kant Karna as saying. Specifically, the US and India may have expressed concern over Nepal’s 5G trials, the analyst told the paper.

Meanwhile, the paper sourced comments from officials at the US and Indian embassies, who expressed concern over the possibility of the Nepalese government allowing Chinese companies into the 5G trials without first going through the usual competitive bidding process.

It seems, from the masses of information included in The Kathmandu Post’s story, that Chinese players have been involved in the Nepalese telecoms market for many years, mainly winning contracts based on their ability to offer lower prices, much as they did in myriad other global markets. But the past few years have brought various tensions, including accusations of corruption and bribery, as well as the US crackdown on Chinese-made gear.

And Nepal is caught in the crossfire.

Nepal Telecom received spectrum from the regulator and a permit to trial 5G as long ago as November 2021. It has shared projected launch dates for its trials, but these have always come to nothing, the paper explained, with no official reason being given.

The telco has been carrying out 5G trials in Babarmahal and Sundhara in Bagmati, Pokhara in Gandaki and Birgunj in Madhesh, and was planning to extend the tests to the other four provinces, it said, but these have now ground to a halt, apparently due to the China issue.

And now those involved in the Nepalese telecoms industry are starting to express real concerns that the country is getting left behind.

“The government does not have a clear policy on 5G, and that may delay the rollout plans for years, may be a decade,” the paper quoted an unnamed former official of Nepal Telecom as saying.

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