VoIP and IPI issues in Nepal

VoIP

VoIP (Voice over Internet Protocol) transmits voice as IP packets over the internet or other IP networks instead of the circuit-switched telephone network.

IP interconnection

IP interconnection is the connection between IP networks of different operators or ISPs for exchanging traffic, usually through an Internet Exchange or direct peering and transit, with agreed technical and commercial terms.

Issues in Nepal

The sector is governed by the Telecommunications Act 2053 (1997), Telecommunications Regulation 2054, the Telecommunications Policy 2060 and the Nepal Telecommunications Authority (NTA) as regulator, with Nepal Telecom (NTC) as the incumbent. (Rules and licensing terms are updated by NTA from time to time.)

Economic issues

• International incoming calls through the PSTN pay termination and settlement rates; VoIP bypasses these, so the government and licensed operators lose revenue and royalty/tax.
• Traditional operators fear loss of voice income, while ISPs and users gain cheaper calls.
• Pricing of interconnection and bandwidth (domestic and international) affects whether VoIP is affordable to small ISPs.
• Illegal "grey" call termination reduces investment in the network.

Administrative issues

• NTA must monitor traffic, detect illegal VoIP and enforce licence conditions, which is technically hard with encrypted traffic.
• Setting rules for interconnection between ISPs and telecom operators, number allocation, and quality of service standards.
• Few IXPs and weak coordination between operators; need to maintain call quality and emergency service access.
• Administrative capacity for licensing, inspection and handling complaints.

Legal issues

• The Act requires a licence for telephone service. Whether ISPs may offer voice, and whether VoIP is allowed only to licensed service providers, must be clear in law; unlicensed termination is punishable.
• Old legislation was written for circuit-switched voice and does not clearly cover new IP services (OTT apps such as Viber, WhatsApp).
• Lawful interception, privacy and data protection, emergency calls and number portability rules are incomplete.
• Cyber laws (Electronic Transactions Act 2063) deal with crime but not specifically with telephony.
• Need policy reform: licensing frameworks for IP telephony, clear interconnection regulation and fair revenue sharing.