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CIAA investigates Nepal Telecom’s 4G expansion over quality concerns

The Commission for Investigation of Abuse of Authority (CIAA) has launched an investigation into Nepal Telecom’s 4G network expansion after finding that the network quality did not meet the design and contractual agreements.

This project, worth 19 billion rupees, has faced quality issues due to the failure to adhere to the contract.

The investigation began following revelations of irregularities in the 4G process, where significant investment did not yield expected benefits for consumers or the company, resulting in substantial losses.

The CIAA has acquired all tender documents related to the 4G project to aid in their investigation.

One critical issue identified was that a component costing around one billion rupees, essential for service quality, was not installed.

The ‘small cell’ devices, crucial for enhancing the speed of 4G and future 5G networks, were not connected as required.

The CCSI, the primary contractor in Nepal Telecom’s 4G expansion, subcontracted Huawei for the installation of 6,000 small cell devices.

However, work worth approximately 70 crore rupees was left incomplete, leading to a deterioration in the 4G service quality.

The CIAA is also examining flaws in the tender process. “Many weaknesses have been observed in Telecom’s 4G process, which is being investigated,” said a CIAA source.

According to the agreement, after completing the 4G infrastructure, a study should determine the coverage capacity and the number of small cells needed.

The initial study indicated a requirement for around 6,000 small cells.

Nepal Telecom has frequencies in the 1800 and 2300 MHz bands for 4G, with small cells designated for the 2300 MHz band.

However, Huawei obstructed this connection. Nepal Telecom’s agreement included constructing 640 BTS towers and installing around 6,000 small cells within the 19 billion rupee budget.

Huawei, as a vendor, is also under investigation. The company’s failure to meet contractual obligations has resulted in losses for Nepal Telecom.

Meanwhile, Nepal Telecom launched 4G service in Pokhara and Kathmandu Valley on January 1, 2017.

The project aimed to extend 4G services nationwide, starting two years later.

Former Managing Director Kamini Rajbhandari filed a complaint with the CIAA alleging financial embezzlement during the 4G extension, with prepared specifications and evaluated global tenders.

After nearly ten months of investigation, the CIAA acquitted the case in November 2018.

Subsequently, Nepal Telecom awarded a 19 billion rupee contract to Chinese company ZTE for the radio access network (RAN) and Hong Kong-based CCSI for the core network.

ZTE was responsible for supplying the core network (switching) and competed closely with Huawei.

Huawei’s representative company secured the contract for the network’s external work.

CCSI, with Huawei as the parent company, handled radio equipment, antennas, towers, power, and transmission, with ZTE completing around 2 billion rupees worth of work and CCSI handling the remaining 17 billion rupees.

While ZTE completed its work on time, Huawei’s associated company experienced delays and quality issues from the start.

Despite an agreement to complete the work before the COVID-19 pandemic, the expansion of towers and other infrastructure was postponed, and the work quality was compromised.

The contract specified the use of equipment from the US, Canada, Europe, Finland, and Australia, but Huawei used Chinese antennas, citing unavailability from the US and Europe.

The CIAA is also investigating the use of these non-compliant devices. Khabarhub

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