Technology Economy & Unrealized Jobs in Nepal
How to ruin job market with capital and investment and the methods to claim your jobs.
Revenue & Budget
Let's start with the military of Nepal. With over 98,000+ active personnel(as of 2025) and annual budget of around 60 Arbas, it is one of the biggest employer in Nepal. The average expense per active personnel is about 6 lakh 12 thousands. Remember most of this money goes into salary and pensions.
Lets move to IT sector, one of the hottest and well paid sector of Nepal. According to 2022 IIDS report, there were about 65,000 people working in IT and annual revenue was around 60 Arbas. This brings the revenue per person to be around 9 lakh 23 thousands.
Now consider NTC, which has annual revenue of 37 Arbas(2023) and total staff of just over 5400 people. It's revenue per employee is around 68 lakhs 51 thousands per employee. Around 8 times that of IT sector. If that is not high enough, let's compare it to Ncell. With an annual revenue of 39 Arbas(2023) and staff count of 538 employee, Ncell boasts around 7 crores 24 lakhs($534k) per employee. For comparison, average revenue per person for industrial sector in USA is around $200k or about 2.7 crores. Ncell's figure is comparable to per employee revenue of Microsoft($1.1M), Google($1.67M), Apple($2.38M) and Netflix($2.59M). Also consider, both Ncell & NTC used to have revenue of around 50 Arba each before the ISP boom of 2022!
To add to the heat let's compare NEA(Nepal Electricity Authority). NEA has revenue of 100 Arbas and employs around 10,000 people. That is 1 crore per employee. NEA made profit of 14.16 Arba in 2022/2023 alone.
While the direct employment generated by NEA is less, it contributes a huge amount to the local construction industry which benefits the local economy. We will discuss latter why this is not the case for telco and to some extent ISP(Internet Service Provider) industry. We will also discuss why NEA will be one of the most profitable industries in the long term.
I have compiled above stats for a list of tech and non tech sectors of Nepal in the following table(Data are tentatively around 2022/2023):
| Sector | Revenue or budget | Employment | Revenue per employee |
|---|---|---|---|
| Telecom | 76 Arba | 6k | 1.26 crores |
| NEA | 100 Arba | 10k | 1 crore |
| ISP(Internet Service Provider) | 25 Arba | 12k | 20.8 lakhs |
| IT(Information Technology) | 60 Arba | 65k | 9.2 lakhs |
| Military | 60 Arba | 95k | 6.12 lakhs |
| Government Education | 220 Arba | 191k | 11.51 lakhs |
| Tourism | 350 Arba | 1.1M | 3.5 lakhs |
| Agriculture | 11.7 Kharba | 4.8M* | 2.43 lakhs |
*calculated as 61.7% of total work force in agriculture in 2024 with data of estimated 7.1 million employed people as of 2017/2018
We can see compared to other service sector, IT industry is not that far away regarding the revenue per employee metric. Compare that to sectors such as NEA and Telcom, they have an astronomically large disparity. Let's discuss why this is the case.
The Outsource Kings
Due to the sheer amount of infrastructure required for telco operation, we can expect a relatively large capital cost. Add to that, the ever changing landscape of technology, we can expect very high depreciation and purchase of new devices and softwares. Problem is that investment in infrastructure and talent largely goes outside of Nepal, into foreign companies and contractors.
With profit margins reaching 20-60% according to various sources1, telco companies are perfectly capable of outsourcing operations abroad. Even paying agencies with staffs paid $150k/yr salary. One of the reason of telco outsourcing is simply because they have the money to do so. Why invest in local economy when you can pay 10-20 times more to foreign contractors!
During 2024 NTC handed Rs. 4.67 Arba(about $35 million) to the only bidder American company for overhauling its billing system2. This happened after an excessive pressure from CIA to eliminate the loss of 3 Arba per year for 7 straight year due inconsistencies in NTC's billing stack.
That is 21 Arba loss! Imagine what could we do with the 21 Arba, IT parks? New hydro project? New Airport?
BTW, I am not here to discuss about the inconsistencies or corruption but the outsourcing. In my humble opinion NTC could have created a new college to educate candidates, brought teachers and experts from foreign to train them and created the billing system in less price than 4.67 Arba. Since, it is software heavy almost all money goes into salary of staffs which Nepali can compete.
This is just an example. Most of the contracts NTC issues are given to foreign companies. Few contracts are taken by Nepali companies who generally form a shallow middle man to the foreign service/commodity purchase.
This has been going on from the start of NTC & Ncell. We can observe it in the staff composition. Particularly the engineering roles.
Ncell has near perfect score of zero telecom engineer. It recently started employing some Computer/IT engineers to maintain its database and application. The telecom part is largely handled by international team. For example I personally observed it during the setup of a BTS(Base Transceiver Station), the lead engineer would be brought from foreign paid by $100-200/hr. The civil construction would be handled by local workers but the tech part, both service & equipment, is almost always imported.
Most staffs in Ncell are related to sales and administrative tasks. Usually, managers, marketers and customer service agents. This begs the question, how can such a firm which is defined by technology skip about its core team of telecom engineers?
Simple answer is Ncell has the core team, except not in Nepal(Considering Ncell used to be part of Axiata).
Compared to others
Let's compare data points of some well known telcom companies like AT&T, Verizon, T-Mobile etc. to that of Ncell & NTC:
| Company | Employee | Revenue | Revenue per Employee | Customers | Customer per employee |
|---|---|---|---|---|---|
| AT&T | 141k | $122B | $865k | 140M | 1k |
| Ncell | 538 | $0.3B | $557k | 13M3 | 24k |
| NTC | 5.4k | $.277B | $51k | 21M4 | 3.8k |
| T-Mobile(All) | 200k | $125B | $627k | 308M5 | 1.54k |
| Worldlink | 5.5k | 0.076B | $13.9k | 900k | 163 |
From the above data, we can see Ncell & NTC both have significantly less number of employee for the same operation.
The Lucrative
In software there is a very lucrative model called subscription model. Software can be replicated infinitely. When subscribers pay for it monthly/yearly it becomes equivalent to printing money. Similar is the case for Telcom, ISP and NEA. Once the infrastructure is setup, there is very few cost for maintenance and support. And a steady supply of periodic revenue.
During the 2000 and 2010s, Telcom and ISP faced high depreciation due to technology change. But for the last decade, since the start of 4G communication, little has changed. Most BTS stations established or upgraded during 2015/2016 4G wave are still around untouched and working with very little maintenance.
5G has been largely stagnant due to explosion of fiber. It was meant to replace wifi and optical fiber which is not happening any soon. Also, there is a physical limit to how much a bandwidth a wireless medium can handle. At saturation air based medium can handle about the same amount of data as a single optical fiber cable. So, high speed internet through air is just not possible in scale.
This has led to telco charging excessively high charge for voice calls which have significantly low bandwidth. Low quality audible voice can be transferred in less than 20Kbps network! Provided there is no competition the duopoly can charge as much as they want for voice. Telco's role for providing high availability critical wireless communication will still be required despite fibers clearly winning the bandwidth game.
The point I am making is that there will always be subscription based revenue in wireless communications. And without effective policy this revenue is always going to be directed outside of economy.
Same is the case for NEA, it will always have never ending stream of income. And since depreciation is relatively low compared to high tech industries, NEA will have a good profit run nearly forever. In my opinion this should reflect as lower electricity prices in long run.
Unemployment Generation
Nepal produces about 1000 engineers(Electronics & Communication) especially targeted for telecom industry. Most of them work for IT firms or go abroad for employment. There is fewer than 3000 roles for such graduates including equipment suppliers like Huwaei and ZTE. This is because equipment manufacturing happens outside of Nepal and most jobs are only there for setup and maintenance.
Here is a neat fact, there are more roles for E&C roles in Nepali military than what Ncell employs! Record breaking revenue & profits don't create jobs nor they help form a healthy economy. Add to the initial licensing requirement of about 1 Arba/year, new comers can not even dare to enter into the wireless telephony market. Which has enhanced the duopoly structure of Ncell & NTC.
Imagine a subscription business with recurring sales that is nearly 100% automated, that is the case with telecom now. Except for few jobs here and there for setup, maintenance and customer service, there are is no need for any job. Even the setup and maintenance can be easily outsourced which finally leads to a lean core team of administrative and customer care staffs. This has reflected into lower employment, higher customer cost due to monopoly and huge margins for the companies.
Jobless market acquisition is one of the burning issues in Nepal. Companies who outsource most of the jobs or companies whose operation is handled from abroad while capturing market are the hidden evils in economic development. These companies can be called as leachers who suck money out of the economy.
The Solution
A significant portion of telco spending goes into infrastructure. The existing companies are rich enough to afford custom made equipments and services. But this hasn't translated into local production, instead they opt for even costly outsourcing.
Most of this is due to lack of electronics manufacturing infrastructure(lack of skilled manpower is just an excuse as there are 1000+ engineers with toughest course in engineering being created!). Initial boost for local electronics manufacturing can be provided by telco industry as they require very custom, niche, high value, low production equipments. Equipments required by telco industry is at least 10 times easier to manufacture than consumer electronics because of flexible cost, power and size constraints.
Example: the antenna in BTS(Base Transceiver Station) is more than 10,000 times larger than mobile phone antenna(by area). The power constraint for mobile phone is about 5 watts max while for BTS we can easily have KWs of power due to fixed connection to main line. Also mobile phone will have to be manufactured in large scale like 100s of thousands to be profitable. Telco equipment manufacturing can be profitable even with few units. Also consider the processing power of a BTS station is comparable to a smart phone. You can get the gist, telco infrastructure is just routers with antenna backed by optical fibers and microwave links. So it can be good start for local manufacturing.
This is a very nice opportunity for government to step in through policies. Add to that there will be no need for investment or financing, this should be quite easy provided the government is keen on just introducing the policy.
In my opinion following policies will greatly reduce outflow of money from telco and create at least 10,000 high paying direct jobs in long run while kick starting the electronics manufacturing in Nepal and helping grow IT industry.
- Complete ban on software based outsourcing. Software or partial software based projects needs to be provided to local contractors and companies only.
- At least 50% part of telco infrastructure(Electronics included) should be manufactured in Nepal. Latter this should be extended to ISP (example consumer grade routers).
- One Arba per year commitment from Telco and ISP(eg. NTC has 70 Arba sitting in bank) for sponsoring research and development in undergraduate and graduate level.
- Easier and cheaper frequency licensing for new comers to telco industry provided they are using locally manufactured equipments.