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Kathmandu Saturday February 03, 2001 Magh 21, 2057.
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Don’t raise tariff only
The government, after raising the electricity tariff by 60 percent within a
year, has now decided to increase the telephone tariff. Earlier, it hiked petroleum
product prices, sending the price of essential commodities spiralling considerably. The
reason cited for raising telephone tariffs - a sharp decline in the income from
international calls - cannot be justified. The state owned NTC has monopolized the
telephone market but has not provided its services satisfactorily. This is a known fact.
The rate for international calls is also higher in Nepal than in India. NTC is the only
state owned corporation that runs in profit, apart from Nepal Oil Corporation. Had NTC
taken some measures to improve its management or lessen overstaffing, things would have
certainly been better than what they are today. This is what has to be taken seriously.
Last year, NTC submitted a proposal to the Ministry of Information and
Communications to raise telephone tariffs. The minimum rental rate for 100 local calls at
present stands at 181 rupees. The cost of each local call above the minimun rate increases
with the number of calls. Of course, the proposal did contain four alternatives to
re-balance the local tariff, as claimed by NTC officials. This apart, the World Bank, a
decade ago, also suggested that NTC fix the local call rate at not less than 343 rupees a
month. Unfortunately, the government refused to go ahead with the WB proposed local call
tariff. Perhaps, the WB rate proposal would not have come, had there been systematic
billing for local calls or a more effective approach to imposing tariff on consumers.
Although the amount of the rental rate hike is yet to be fixed, officials at
NTC have already announced that the hike will be significant. Obviously, the rate for
internet, e-mail and international calls will also go up significantly, adding extra
pressure on the already strained economic conditions of ordinary consumers. The prices of
petroleum products and transport fares have also gone up considerably in recent days. The
telephone tariff move cannot be considered a step in the right direction at a time when
consumers are facing a stiff rise in the cost of daily essentials and are already paying
high enough electricity and water tariffs. If NTC is failing to make adequate profit, it
is because of poor management and lack of an effective approach to reducing overstaffing.
The situation can be improved only if NTC meets its target for distribution of cellular
mobile phones and ensures a proper service for its customers. The move to hike telephone
tariff must not become a burden on consumers. The NTC has to find alternatives that really
help consumers more than the corporation.
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