UNCTAD Regional Roundtable on Electronic Commerce and Development,

1. UNCTAD Regional Roundtable on Electronic Commerce and Development, Colombo (Sri Lanka) 25-27 October 1999 LDCs and e-commerce The example of Nepal Shashank Kansal, President/CEO - Digital Telecom International Secretary General - Asia Pacific Trade Point Forum (APTPF) Voice:977-98102-0076, Fax:9771-529403 GPO Box:10528, Kathmandu, Nepal. http:www.nepalonline.net Shashank@balaji.com.np Colombo, Sri Lanka, 25-26 October 1999

2. 1999 • VSAT International Connectivity Allowed • UNLIMITED Bandwidth available • Prices Most Competitive in South-Asia (US$30 per month/unlimited access vs previous rates of US$2/hour) • New Telecom Opportunities like GSM and Paging start operations • Government takes initiatives to bring the IT on the forefront for Development. Colombo, Sri Lanka, 25-26 October 1999

3. Advantages and Limitations • Price reduction or Access • Hosting content in Nepal with huge capacity availability. • More POPs around the country - Nation Wide E-Commerce initiative. • Number of users likely to more than treble • WebSite creations! • Online Payment via Cyber Cash, Credit Card etc. (Offshore) • Government slow on Law, Banking, Infrastructure. • Call Centers, Unique in World !!! Colombo, Sri Lanka, 25-26 October 1999

4. 1998 “The Year of Convergence” • More POPs outside Kathmandu • No bandwidth expansion (via NTC) as market expects NTA to open up the skies - VSAT. Service is affected. • Customer support improves as market focus shifts to quality to customer support and response. • Several new businesses get new opportunity with internet. Colombo, Sri Lanka, 25-26 October 1999

5. 1996-1997 • Three private ISPs in the country • Domain services available free • NGO, INGO, Govt. Organizations, Travel Agencies, Small Organizations, Corporate, Consulates, Expatriates etc start using the Email and Internet most due to expensive Telecom alternative! • First low speed digital link to Singapore Telecom established in 1995, subsequently upgrades to higher speed voice-grade lease circuit. • Price drop from Rs. 25/Kb to Rs 10/Kb Colombo, Sri Lanka, 25-26 October 1999

6. The Begining:1993-94 • Experimental (Free) email service is introduced by Ronast and Private Sector. Both organizations user dialup services provided by ERNET, New Delhi. • Only email services (UUCP) introduced for low end Telecom. Colombo, Sri Lanka, 25-26 October 1999

7. Growth (Estimates) • Between 1994 and 1997 email only users grows rapidly from 0 to 3,500 • 1998,1999 email only users growth decreases in favor of Internet services • Email users now about 10,000 accounts (actual user about 30,000) • Between 1996-1998 Internet users increase from 0 to 6,000 accounts (around 12-15,000 users) • In 1998 growth of Internet users slows down: bandwidth constraint, high prices deter new users. Colombo, Sri Lanka, 25-26 October 1999

8. Growth & Prices • Most of these figures likely to more than treble between June 1999 and June 2000 due to VSAT connectivity: • Lower costs • More bandwidth • More POPs • Email 15,000 email accounts (50,000 users) • Internet 20,000 PPP accounts (100,000 users) Colombo, Sri Lanka, 25-26 October 1999

9. Bandwidth • Key Issue for E-Commerce • VSAT is the best Alternative • 1999: major change, Internet bandwidth increased over 5MB, VSAT. • 2000-01: international bandwidth expect to exceed 15MB • National bandwidth: East West Fiber Highway Colombo, Sri Lanka, 25-26 October 1999

10. Ownership • ISPs - all private ownership except NTC and IOE, new entrants • Number of ISPs increase from previous 3 to 7-10 before the end of 1999 • NTC (a 100% government company, thus far) likely to provide access services in 1999 • IT companies start offering commercial services over the web. Colombo, Sri Lanka, 25-26 October 1999

11. Role of government (NTA) • Liberal policies • Best Telco infrastructure in the region • Incentive/subsidies to provide access to rural areas, poor and under privileged • Nepal better off than neighbors including India. • Cyber Law, IT-Policy • Education and Computer Awareness Colombo, Sri Lanka, 25-26 October 1999

12. Regulation • Internet regulations on the whole are progressive but are quite stringent • Access to content made the responsibility of ISP and end-users • Levies of multiple taxes could dissuade many potential users • 4 + 2 % tax on “revenues” Colombo, Sri Lanka, 25-26 October 1999

13. Manpower availability and training • Most of the ISPs have used local computer and communications engineers and have been trained in-house • Some ISP consultancy services purchased from third country • Trained manpower is not expected to be a major hurdle in ISP infrastructure • End user training is widely available from ISPs and computer schools. Colombo, Sri Lanka, 25-26 October 1999

14. Future - E-Commerce • International connectivity - VSAT and Fiber Optics • Local content in international languages and vice versa • Web technology development • Private and International Banks - swift, credit cards, cirrus. • E-COMMERCE for SME and SMI • Virtual Galleries Colombo, Sri Lanka, 25-26 October 1999

15. Partnerships • Partnerships are the future • Governments should identify the Private Sector Importance • Geo Political Boundaries disappear • It is Now OR NEVER • Have a Great Electronic Information Future Colombo, Sri Lanka, 25-26 October 1999