India, China to Compete in Nepal's Internet Services Sector

China is challenging India's monopoly in providing internet services to Nepal with its optical fiber network expected to roll out internet services from August 1 in the Himalayan republic.

New Delhi (Sputnik) — For years, Nepal has depended on India for internet services and is connected to its southern neighbor's optical network via Bhairahawa, Birgunj and Biratnagar. But the work of laying optical fiber network on the Chinese side will be completed by the end of July after it was suspended in June due to the death of a Chinese worker in an avalanche.

The Nepalese side has already completed the task of laying optical fiber and is waiting for it to be connected with the Chinese side.

"Connection test was already conducted. Nepal would have already been connected with Chinese internet if the work was not halted in June. The work has resumed in full pace since the last week and if things go as per plan, Nepal will be connected with the Chinese internet from the beginning of August," PTI quoted Shobhan Adhikari, deputy spokesperson for Nepal Telecom.

Nepal will test the connection and subsequently work on purchasing internet bandwidth from China once it is connected. Adhikari said he expected the entry of Chinese companies into Nepal will bring rates down for Nepalese users.

A Global Times report said the Chinese internet services will be available from August 1 in Nepal, "ending India's bandwidth supply monopoly in the country". But the report remains silent on the status of Internet firewalls which China uses to restrict the free flow of online information, particularly content offensive to China.

The entry into the Nepalese internet service providers market is part of China's overall efforts to enlarge its presence in Nepal and challenge India's monopoly in the landlocked nation. Last August, it agreed to a transit treaty and a rail link with Nepal through Tibet.

Indian experts said the country needs to be ready with strong competition from China in the South Asian countries in trade and commerce.

"The size of the Chinese economy is massive and they are keen to expand their business footprint in a large market like South Asia. While there are political differences between India and China in political and strategic spheres, Chinese companies are investing heavily in India's telecom, high-engineering space, electronics and other sectors. Like in India, our local companies will have to compete with them elsewhere abroad," Dr Smruti Pattanaik, Research Fellow at the New Delhi-based Institute for Defence Studies and Analyses, told Sputnik.