After establishing itself as the leading player in urban Nepal, WorldLink, the country’s largest ISP, is now venturing into rural Nepal to provide reliable and affordable internet services.
--BY NIKEETA GAUTAM
WorldLink Communications : 25 Years of Connectivity ExcellenceThe company has recently received an investment of Rs 1.35 billion from CDC Group, the UK government's development finance institution. WorldLink has channelled a part of the investment towards furthering its reach in rural areas. The company is also structuring and decentralising in an attempt to reach out to different nooks and corners of the country. As WorldLink attempts to increase internet penetration, it has been promoting and introducing affordable pricing plans in villages and other rural centres.
A Journey Full of Accomplishments
Although the company’s grand ambition to unite Nepal through the internet speaks to its current stature as an internet giant, its origins were much more modest.
WorldLink Communications began with a store-and-forward email service over a dial-up link 25 years ago. Now, the company owns its own leased fibre backbone and has a strong 400,000 subscriber base which it aims to take to 480,000. Started from a single room with one computer, modem, and the vision of a young entrepreneur, WorldLink is an aspirational success story for many Nepali startups.
It was in 1995 when 22-year old Dileep Agarwal, while pursuing his graduate degree at Bates College in the US, started an e-mail service during his summer vacation in Nepal. “At that time, it was wonderful to have email instead of mail coming from the post office. It replaced fax,” says Keshav Nepal, CEO of WorldLink. He joined the company 18 years ago.
A few years after its establishment, WorldLink started using the dial-up internet where the company connected to providers in America through a leased line. It then shifted to the Very Small Aperture Terminal (VSAT). Instead of relying on the copper lines, the company operated through VSAT terminal connected to a satellite, and in between, also using Ethernet technology.
“As VSAT was quite expensive and wireless is a shared spectrum, limitations existed in that technology," Nepal says. So, in 2008, WorldLink connected to India via fibre. “From that, the backbone to connecting to the rest of the world was very easy,” Nepal says. WorldLink buys bandwidth from various IP transit locations across the world including Mumbai, Chennai, Singapore and London interconnecting with various international service providers like TATA, Airtel, Singtel and Cogent.
The turning point for the company came when it went wireless. “After that, we served many banks and rolled out metro Ethernet to compete with ADSL,” recalls Nepal.
WorldLink set another landmark when it introduces FTTH technology in 2012, after years of research. In 2018, the company announced a partnership with the Finnish multinational IT infrastructure firm Nokia to expand its FTTH network to reach out to one million Nepali households. “With this, we could compete globally because of the same technological parity. We are not far behind in terms of technology than people in the developed world,” says Nepal.
Pioneering in the fibre connectivity in Nepal, WorldLink is the first private company in the country to connect through satellite. “We are the first to have our own wireless trunk network that went from Kathmandu and then east to west,” mentions Nepal.
The biggest challenge for WorldLink was to compete with a government entity with much more resources and protection from the government. “When Nepal Telecom announced ADSL service, we requested them to collaborate with us to make it accessible to the general public,” he says. But the government denied their request. “This way, we did not have any competitive parity,” he says.
With the advent of FTTH, Nepal says the company got better in terms of technology compared to ADSL. “Now, Nepal Telecom is also rolling out FTTH. They realise that their ADSL base has shrunk,” says Nepal.
At present, WorldLink covers 390,000 households and over 68 districts of Nepal and has 10,000 enterprise circuits connected to offices and organisations. Till date, the length of its fibre network across the country totals 8,000 kms. It has more than 100 offices throughout the country and has created employment opportunities for around 3,500 people. The company’s other accomplishments include reaching to remote areas of Nepal such as Chhatrakot and Ruru rural municipalities in Gulmi districts.
Vision, Mission and Marketing Strategies
WorldLink began with a vision to connect everyone, everywhere, all the time. “We have always been exploring on connecting people better and providing access to the internet in unreached locations,” says Nepal. The company’s mission is to enrich the lives of people through connectivity. “We are planning to go to the Internet of Things (IoT) now,” says Nepal.
The marketing strategy of the company aligns with its mission to enrich the lives of people. WorldLink has also been bundling up offers like Led TV internet in recent days to add value to the lifestyle of the general public. “We have been tying up with TV and heater manufacturers. Now, we are also planning to bundle up with washing machines," he says.
Policies have always been a hurdle for any Nepali IT company. According to WorldLink CEO Nepal, though 100 ISPs are operating in the country, the government barely has recognised or given priority to the works of ISPs. “For instance, the decision of Nepal Electricity Authority (NEA) to increase the electricity pole rent by 500 percent is discouraging,” he remarks, adding, “If you look at the barrier to entry, a big corporate house in Nepal is also facing difficulties in getting a mobile telecommunications license.”
Market Presence and Turnover Growth
WorldLink is the largest ISP in Nepal commanding a 45 to 50 percent share in the fixed broadband market. The phenomenal growth of Wi-Fi connectivity, particularly in urban areas, has been one of the key factors for the company in this respect. “In Kathmandu and some major cities even small eateries offer Wi-Fi connectivity to their customers. If we compare it to other infrastructures such as in public health and education, the internet is quite accessible to most, especially in urban areas,” states Nepal. According to him, internet prices can come down if the ISPs aggregate. “Now, we are all duplicating, the market is fragmented. If we consolidate, the rate will go down,” he says.
The revenue of WorldLink has grown by Rs 1 billion every year for the last four years. “The annual turnover last year was around Rs 5.5 billion. This year, we are expecting to reach Rs 6.5 to 7 billion.”
“CDC’s investment will be utilised to expand our services to rural Nepal”
A few months ago, WorldLink received an investment of Rs 1.35 billion from the UK government's development finance institution, CDC Group. What factors convinced CDC Group to invest in a Nepali ISP like WorldLink?
This investment is being utilised to go to the villages more. As the bigger towns and cities have already been rolled out, so most of the population is there. As the density is low in villages, we need fibre. As people in villages cannot spend as much as people in the cities, in those areas we must have some funds coming in.
CDC is a Development Financial Institution (DFI) and one of their KPIs is that they are a responsible investor. They invest in areas where the rural population gets to benefit in terms of service and employment. We qualified within those parameters. Apart from that, it should be a company where the potential for growth is high. Also, the internal management of the company should be very sound. There are rules like business integrity and clean legal aspect. With due diligence, we met all the criteria.
What kind of challenge is WorldLink facing right now?
The challenge is the expectation of the customer is growing. They want better service at a cheaper rate. As the company grows, the staffs want a better salary and the government wants to increase tax. This is the paradox. And, the bottom line is to be efficient in everything we do. So, driving out inefficiencies and still meeting the expectations of the customers and all players of the ecosystem is the biggest challenge.
For balance, we continuously improve our human capital. It is always cheaper to train people than hire more people. We are looking at major cost drivers, we are looking at asset utilisation and how the same asset can be utilised more without hurting customers' pockets.
What particular benefits can customers get by subscribing to WorldLink?
We look at three pillars: Making internet fast, reliable and affordable. Besides, WorldLink's focus is on good customer service. To make internet affordable, as well as add value to people's lifestyles, we have been bringing various offers tying up with electronic brands. This strategy has been really popular and is liked by all our customers.
For customer service, we have a ticketing system. If you ring our call centre, you will get a ticket via email and SMS. If there are tickets which have not been solved for the last 24 hours, it gets escalated. We follow the ticketing mechanism. We also follow installation processes in a way that the customers-to-problem ratio goes down. These are the KPIs (Key Performance Indicators) of the support department. We continuously work towards better installation, customer education and make sure our network is properly maintained.
How is the competition for WorldLink? What is the company doing to stay ahead?
Competition is never healthy. In business, everyone comes aggressively with their initiatives trying to stay ahead in the market. In ISPs, I would say, the market is not so unhealthy, nor so healthy, it is normal.
First and foremost, we need to look at the aspirations of customers. We have to align with their needs. We have five core values- company, customer focus, trust, honesty, innovation and efficiency. We are always guided by these five core values. Most of the processes fall within these values. Because of these five core values, we are able to stay ahead of the competition. We mostly initiate innovation. You can see other ISPs copying many campaigns and offers started by us.
We also have a strong brand image. We want to preserve our brand image that differentiates us from other providers. We have some aggressive plans for small villages where we have really cut down the price and given to the customers. So, the first thing is people should use the internet. When they use it, they will realise its importance. Internet should be a commodity which everyone should be able to afford. We also do some rural area-focused promotional activities which are 30 percent cheaper than in urban areas. The most important thing is we have made our services cheaper to rural subscribers.
The plan is to keep growing. We have a regional structure. The focus is on decentralising our branches. There will be regional offices which will act as a head office for branch offices so that they can focus on the geographic area and develop the area. We plan to serve the masses at reasonable prices and still be profitable.
This fiscal year, we expanded to around 30 locations around the country. WorldLink has a capacity to provide services to one million customers. Right now, we are even penetrating locations with a population of 100-200 inhabitants. Though there is no profit, we are going to these areas so that in the future we can have sizable revenue from there.
Subscribers in Nepal generally complain about the quality of service in terms of internet speed and customer care being provided by ISPs. How does WorldLink ensure the quality and reliability of its service?
We have also been hearing about customers complaining about speed reduction. There are a few reasons for this - the increasing number of gadgets, increased apps in the phone and other devices and the fact that videos have upgraded to HD quality, which requires more data. This makes us feel that the speed has gone down.
Next is the Wi-Fi presence. Three years ago, there were few homes with Wi-Fi, so, we were enjoying clean Wi-Fi spectrum. Now, everybody has a router in their home, so the Wi-Fi interference has gone up. So, if we are a bit far away from the router or if neighbour's Wi-Fi interferes with our signal, that slows the internet. The problem is with the last mile Wi-Fi. So, now we are planning to introduce dual-band routers. We are testing it and will come up with it by next month, most probably.
WorldLink was reported to have faced financial and other difficulties a couple of years ago. How did the company manage to get out of trouble?
The government thought that we were evading taxes. The government has all the right to investigate the company, but they went one step further and froze all our bank accounts. In such a situation, we either needed to shut the business or fight. We chose to fight and filed a case in court. The court ordered that government cannot close the bank accounts. With that decision of the court, our bank accounts were opened again. We developed further. But this case has been ongoing. It has been eight years and the file is still there. The investigation is still going on. We stood and fought against it.
This was also a lesson for us as we learnt that we should not explain things in a dubious way. Interpretation of law could be used against us. We should not leave anything in the legal aspect that could cause potential jeopardy to the company.
What do you think about the penetration of internet in Nepal?
Internet penetration is not as it should have been. In cities and urban areas, it's very good. There are multiple providers, from cheap ones to expensive ones. We hardly find people who do not use the internet. Even if they don't own it, some share with their neighbours. We need more fibre. For this, the government should allow operators to allow some kind of 4G network to the ISPs. If the government allows some spectrum to roll out fix data plan to the villagers, we can really connect those villagers at an affordable rate.
Nepal has the highest internet tariff rates among SAARC countries. How do you think internet prices can come down?
In the broadband side, it's not that expensive. In data definitely, it's expensive. And given that we are far away from the sea, all the internet comes from under the submarine cables. We need to carry traffic from the Indian Ocean and that also incurs some kind of cost. Despite that, the internet cost with broadband is not that high. Bangladesh has cheaper bandwidth rates because the submarine cable comes to Bangladesh. But in landlocked countries the cost is high.
What do you think about the 'Digital Nepal' initiative of the government?
I don't know what the government is doing. Last time they imposed TSC for the internet. So, what impact does this make on Digital Nepal? The government should do more research, consult stakeholders on a long term basis instead of just having slogans and campaigns. However, the government is promoting digitisation, which is a good thing. But it has to be realistic.