Starting an Internet Service Provider (ISP) business in Nepal means understanding the rules and regulations that control how internet services work in the country. The Nepal Telecommunications Authority (NTA) is the main government body that oversees and manages everything related to ISPs. Anyone who wants to become an ISP must go through a full registration and licensing process with the NTA. This process includes meeting several legal, technical, and financial requirements to make sure the services are safe, reliable, and can last long term. These rules help ensure good service quality, fair competition, and protect the users. So, registering with the NTA is the first and most important step for anyone who wants to start providing internet services and help improve digital access in Nepal.
Types of ISP Licenses in Nepal
In Nepal, Internet Service Providers (ISPs) can apply for different types of licenses depending on where and how big they want to operate. Each license has its own rules for investment, fees, and how long it stays valid.
Here are the three main types of ISP licenses:
1. National ISP License
- Where you can operate: All over Nepal
- Minimum investment needed: NPR 50 million
- License fee: NPR 300,000
- Valid for: 10 years (can be renewed)
2. Regional ISP License
- Where you can operate: Only in specific regions or provinces
- Minimum investment needed: NPR 20 million
- License fee: NPR 200,000
- Valid for: 10 years (can be renewed)
3. Local ISP License
- Where you can operate: In small areas like a municipality or ward
- Minimum investment needed: NPR 5 million
- License fee: NPR 100,000
- Valid for: 5 years (can be renewed)
These license types allow ISPs to choose how big or small they want their service area to be. Businesses should pick the one that best matches their plan and budget.
Legal Requirements to Start an ISP in Nepal
1. Company Registration
Before applying for an ISP license, your business must be legally registered in Nepal. This means you need to register your company with the Office of the Company Registrar under the Ministry of Industry, Commerce, and Supplies. Your business should be established as either a private limited, public limited, or another legally recognized entity.
- A company certificate, PAN registration, MoA and AoA are typically required.
- The company’s objective should clearly include providing internet or telecommunication services.
2. Ownership Requirement
To promote national ownership and control over internet infrastructure, the majority of shareholders in the company must be Nepali citizens.
- Foreign investment is allowed but cannot exceed the permitted ownership limit.
- Shareholding documents must be submitted to prove compliance.
This ensures that the control and major decision-making power stay within the country.
3. Compliance with Telecommunications Act, 2053 (1997)
Your company must operate in line with the Telecommunications Act, 2053 (1997) and its amendments. This law outlines:
- Rights and responsibilities of service providers
- Penalties for non-compliance
- Consumer protection rules
- Technical and quality standards
Following this law is essential to legally offer internet services and avoid penalties or cancellation of your license.
4. Obtaining an ISP License from NTA
The Nepal Telecommunications Authority (NTA) is the main body that issues ISP licenses. To get licensed:
- Submit a formal application to the NTA
- Include your business plan, technical proposal, financial capacity, and legal documents
- Pay the prescribed application and licensing fees
Once approved, you’ll receive a license that permits you to offer internet services in your chosen area (local, regional, or national).
5. Security Clearance
Before granting a license, the NTA requires applicants to receive security clearance from relevant government security agencies. This step ensures that the business is not involved in any activities that may threaten national security.
- Background checks of directors and major shareholders are conducted
- Clearance certificates must be attached to the application
Documentation Process for ISP License Application in Nepal
If you want to start an Internet Service Provider (ISP) in Nepal, you need to prepare and submit several important documents to the Nepal Telecommunications Authority (NTA). These documents help show that your company is legal, financially prepared, and has a clear plan to provide internet services. Submitting the correct documents is a big part of getting your ISP license approved.
First, you’ll need to fill out the ISP license application form, which you can get from the NTA website or their office. You also need to submit your Company Registration Certificate, which proves your business is officially registered in Nepal. Along with that, you must include the Memorandum and Articles of Association (MoA and AoA), which explain your company’s purpose, how it is managed, and how it plans to operate.
You’ll also need a clear business plan that shows what kind of internet services you will offer, who your customers will be, how much you expect to earn, and how you’ll grow your business. A technical proposal is required too this explains your network design, the technology and equipment you’ll use, and how you will provide internet service to your customers. Lastly, the NTA asks for a bank guarantee to make sure you can handle the costs of running the service. The amount depends on the type of license you are applying for. It’s a good idea to get help from legal and technical experts before sending your documents. This can help you avoid mistakes and speed up the approval process.
Documents You Need to Submit:
- Filled-out Application Form (available from NTA)
- Company Registration Certificate
- Memorandum and Articles of Association (MoA and AoA) (company details and structure)
- Business Plan (services you’ll offer, pricing, and future plans)
- Technical Proposal (network setup and technology)
- Bank Guarantee (based on your license type)
Technical Requirements for Running an ISP in Nepal
To run a successful Internet Service Provider (ISP) in Nepal, you must meet certain technical standards set by the Nepal Telecommunications Authority (NTA). These requirements help make sure that ISPs can provide fast, secure, and reliable internet to customers. Without the right technical setup, it’s not possible to get or maintain an ISP license.
During the application process, the NTA checks whether your company has the right equipment, infrastructure, and technical knowledge to operate a high-quality network. This often requires a good amount of investment and skilled experts to build and maintain the system.
Here are the main technical requirements explained in simple terms:
Network Infrastructure
Your ISP must have a strong and stable network infrastructure. This means you need the right servers, routers, cables, and data centers to manage internet traffic smoothly and handle many users at the same time without interruptions.
Interconnection with Other Networks
You must arrange for proper interconnection facilities. This means your network should be able to connect with other ISPs inside Nepal and also with international gateways so that users can access websites and services from around the world.
Quality of Service (QoS)
Your services must meet the Quality of Service (QoS) standards defined by the NTA. These include things like good internet speed, low downtime, and fast response to technical issues. The NTA regularly monitors this to ensure customers get reliable service.
Network Security
You are required to have strong network security systems in place. This includes using firewalls, secure servers, and encryption to protect your users’ personal data and prevent hacking or misuse of the network.
IPv6 Support
Your network must support IPv6 (Internet Protocol version 6), which is the latest standard for internet addresses. This is important for future-proofing your services, as IPv4 addresses are running out globally.
Meeting these technical requirements shows that your ISP is capable of delivering a modern, secure, and high-quality internet experience. It also builds trust with both the NTA and your future customers. If you’re unsure about any of these areas, it’s a good idea to work with technical consultants or network engineers during the setup phase.
Step-by-Step ISP Registration Process in Nepal
Starting an Internet Service Provider (ISP) business in Nepal involves multiple stages. Each step is handled by the Nepal Telecommunications Authority (NTA) and requires careful planning, documentation, and compliance. Below is a breakdown of each step explained in simple language:
1. Submitting the Initial Application
The first step is to submit a detailed application to the NTA. This includes a complete business plan outlining the services you plan to offer, your target customers, and how you will build your network. You also need to include technical information like the design of your network, what equipment you will use, and how your internet services will work. In addition, you must provide financial documents showing how you plan to fund the business and how much revenue you expect. This application is very important because it helps the NTA decide if your ISP plan is realistic and fits within national rules.
2. Technical Review and On-Site Inspection
Once the NTA receives your application, their technical team will review all the documents to see if your proposed network and services meet technical standards. They may visit your planned setup locations to check the actual infrastructure, such as servers, routers, and cables. You’ll need to prove that your equipment is certified and that your technical staff are qualified to run the network. This step ensures that your system will be reliable and safe for users.
3. Financial Verification and Bank Guarantee
In this stage, you must prove that your business is financially ready to operate. The NTA will check your audited financial statements and ask you to submit a bank guarantee—a financial security that shows you are serious about your commitments. You must also show that you have enough capital to cover the setup and operating costs. If you have foreign investors, you’ll need to follow the rules for foreign direct investment (FDI) and explain where the funding is coming from. This helps the NTA make sure your ISP will be financially stable in the long run.
4. Payment of Fees and Final Document Submission
After passing the technical and financial stages, you will need to pay the required license fee. The fee amount depends on the type of license you are applying for (national, regional, or local). You must also submit all the final paperwork, including certified copies of legal documents, technical plans, and completed forms. Everything should match what was submitted earlier. This step confirms that all parts of your application are complete and ready for final review.
5. License Issuance and Start of Operations
If all the previous steps are approved, the NTA will issue your official ISP license. The license will mention your approved service area, the rules you must follow, and the technical standards you need to maintain. After receiving the license, you can begin setting up your services for customers. However, you must continue to follow NTA rules, such as providing good service, protecting customer data, and sending regular reports. This license allows you to officially start your ISP business in Nepal
Cost Structure for ISP Registration and Operation in Nepal
Starting and running an ISP in Nepal involves several important costs. Here are the main expenses to keep in mind:
- Initial Registration Fee
A one-time fee paid to the Nepal Telecommunications Authority (NTA) when applying for the ISP license. - Annual Royalty Fee
A yearly fee based on a percentage of your total income from internet services, paid to the NTA. - Renewal Fee
A fee paid at the end of your license period to renew and continue your ISP operations legally. - Infrastructure Investment
Costs for purchasing and setting up equipment like servers, routers, cables, and other network hardware. - Operational Costs
Ongoing expenses such as salaries for staff, maintenance of the network, and customer support services.
Time Duration for ISP Registration in Nepal
The ISP registration process in Nepal typically takes 3 to 6 months. The timeline depends on several important steps:
- Application Preparation and Submission: 1–2 weeks
- Initial Review by NTA: 2–4 weeks
- Technical Evaluation: 4–6 weeks
- Security Clearance: 2–4 weeks
- Final Approval and License Issuance: 2–3 weeks
Delays can happen if the application is incomplete or if additional information is needed. To speed up the process, make sure all documents are accurate and complete when you apply.
Government Fees for ISP License in Nepal
When starting an ISP in Nepal, you will need to pay several fees set by the Nepal Telecommunications Authority (NTA). These fees help support the growth of the country’s telecom sector and ensure fair business practices among providers. Here are the main fees you should expect:
- License Application Fee: This is a non-refundable payment made when you submit your license application. It covers the cost of processing your request.
- License Fee: Once your license is approved, you must pay a one-time license fee to officially operate as an ISP.
- Annual Royalty Fee: Every year, ISPs pay a percentage of their total income (usually about 4%) to the government as royalty.
- Rural Telecommunications Development Fund (RTDF): ISPs contribute a portion of their revenue to this fund, which helps improve internet access in rural and remote areas.
- Frequency Fee: If your ISP uses wireless frequencies, an additional fee may apply for using these airwaves.
Authorities Regulating Internet Service Providers in Nepal
In Nepal, several government bodies work together to regulate and support Internet Service Providers (ISPs). Each authority has a specific role to ensure the smooth functioning, security, and legal compliance of ISP operations.
The main regulator is the Nepal Telecommunications Authority (NTA), which oversees all telecom services. The Ministry of Communication and Information Technology develops policies that guide the sector, while the Department of Information Technology focuses on cybersecurity and managing IT infrastructure. Financial matters related to ISPs are supervised by the Nepal Rastra Bank, and the Department of Commerce handles company registration and business compliance.
ISPs must follow the rules and maintain good coordination with these authorities to operate legally and effectively in Nepal.
Key Regulatory Authorities:
- Nepal Telecommunications Authority (NTA): Telecom regulation and licensing
- Ministry of Communication and Information Technology: Policy development
- Department of Information Technology: Cybersecurity and IT infrastructure management
- Nepal Rastra Bank: Financial regulations
- Department of Commerce: Business registration and compliance
ISPs must prove they can provide all these services when applying for a license and continue to maintain them while operating.
Rules ISPs Must Follow to Operate Legally in Nepal
To keep their licenses and run their services legally, Internet Service Providers (ISPs) in Nepal must follow several important rules set by the Nepal Telecommunications Authority (NTA). These rules are designed to protect users, support fair internet access, and make sure the services are safe and reliable.
Here are the main rules ISPs need to follow:
- Protecting User Data: ISPs must keep customer information safe and private by using proper data security systems.
- Working with Law Enforcement: In special cases, ISPs must cooperate with government agencies by allowing legal monitoring of internet activity when approved by law.
- Fair Internet Access (Net Neutrality): ISPs should treat all internet traffic equally, without blocking or slowing down certain websites or services.
- Following Content Guidelines: They must block or filter certain content if the government orders it, such as harmful or illegal material.
- Providing Good Service: ISPs are expected to meet performance standards like stable speed, uptime, and customer service as set by the NTA.
To show that they are following these rules, ISPs must also send regular reports to the NTA and may go through audits.
Yearly Reports ISPs Must Submit in Nepal
To keep their licenses and show they are following the rules, Internet Service Providers (ISPs) in Nepal must send yearly reports to the Nepal Telecommunications Authority (NTA). These reports help the NTA check that ISPs are running properly, offering quality services, and staying secure.
Here are the main things ISPs must include in their annual reports:
- Financial Reports: Audited reports showing the company’s yearly income, expenses, and profits.
- Subscriber Information: The number of internet users, types of services offered, and growth over the year.
- Service Quality Data: Details about internet speed, uptime, and other performance indicators.
- Regulatory Compliance: Proof that the ISP has followed all government rules and NTA guidelines.
- Security Reports: Any major security problems or cyberattacks that happened during the year, along with how they were handled.
ISPs must send these reports on time and with accurate information to stay in good standing with the NTA and continue operating legally.
Conclusion
Establishing and operating an Internet Service Provider (ISP) in Nepal requires a thorough understanding of the legal, technical, and financial frameworks set by the Nepal Telecommunications Authority (NTA). From selecting the appropriate license type to preparing detailed business and technical plans, ISPs must meet strict compliance standards to ensure quality, security, and sustainability of their services. The application process involves multiple stages, including company registration, security clearance, submission of key documents, and payment of government fees. Ongoing responsibilities such as adhering to technical requirements, protecting user data, maintaining service standards, and submitting annual reports are essential to remain in good regulatory standing. By following these guidelines and regulations, ISPs not only gain the legal authority to operate but also contribute to expanding Nepal’s digital infrastructure, enhancing internet accessibility, and supporting the nation’s broader goals of digital inclusion and innovation.