Nepal’s Internet Outage Exposes Delayed Payments to Indian Telcos

An internet outage lasting approximately five hours on May 3, 2024, left home broadband customers across Nepal disconnected, revealing a longstanding issue of delayed payments by Nepalese ISPs to Indian firms supplying internet bandwidth. The outage occurred as ISPs struggled to pay bandwidth fees to Bharti Airtel Ltd, a major provider of internet access in the country.

The tax dispute between Nepalese ISPs and the government had halted ISPs’ requests to purchase US dollars to pay Airtel, resulting in significant outstanding dues to Indian bandwidth providers, estimated at Rs 200 crore. A press conference held by the ISP Association of Nepal (ISPAN) warned that further delays in payments could result in a complete loss of internet access in the landlocked country.

Despite these warnings, Nepal’s Ministry of Communications and Information Technology did not clear ISPs’ foreign exchange requests, leading to the connectivity disruption. Nepalese ISPs have not paid Airtel or Tata Communications Ltd for 13 months, with no foreign exchange approvals forthcoming from the government. This standoff has discouraged at least one Indian firm, Sify Technologies, from investing in Nepalese ISPs, citing unresolved payment issues.