Nepal Government introduced information technology in 1971 to process the national population census data. National Computer Center (NCC) was established in 1974 with the objective of providing IT training within Nepal. NCC developed software for various government agencies, and processed examination results for Examination Control Board of Ministry of Education and Tribhuvan University. It also conducted regular training courses on computer literacy and software applications. NCC was dissolved in 1998 and currently there is no computer-training institution in the government sector.
The introduction of IT and IT related services in Nepal was led by private sectors. The private sectors initiated training centers, created Nepali fonts, as well as did trading on both Macintosh and IBM compatible personal computers. Starting in early 1980s Apple computers were introduced in Nepal, followed by the introduction of IBM compatible PCs afterwards. One of the early initiatives in exporting software from Nepal was done by a company called DSI, founded by an American national. By mid-80s, there were many private trading houses in Kathmandu dealing in computers. During that time several private computer institutes were opened in the urban areas to provide basic computer training. However, the progress was limited till the democratic movement in 1990. It was after the movement of the 1990 and liberal environment that the growth of IT industry flourished in Nepal.
In 1992, Mercantile Communication Pvt. Ltd. started commercial e-mail through Internet and it was formally registered in 1995 as the first Internet Service Provider (ISP) in Nepal. Then several private ISPs were registered. The country now is enjoying the development of ICT from private sectors, NGOs, and associations. Under the Ministry of Science and Technology, High-level Commission for Information Technology has been formed, which develops ICT related policies and helps the government, and other ICT related organizations to develop ICT in the country. Every year Computer Association of Nepal organizes national exhibition in Kathmandu to help introduce new ICT developments from around the world to the Nepali people.
VSAT was liberalized in Nepal in 1997 as per the Telecommunication regulation 1997. As a result the number of ISPs increased and the price of Internet service kept decreasing. Moreover, Nepal government regulated and de-licensed the ISM Band wireless frequencies (2.4 GHz and 5.8 GHz) in 2007 that opened more opportunities for the extension of wireless network in the rural and urban areas. Nepal Government released the Science and Technology Policy -2005 and Electronic Transaction Ordinance (Cyber law) - 2005. The Telecommunication Regulation - 1997 has opened more opportunities for telephone operators as well as ISPs. Now there are more then 38 ISPs, 3 fixed telephone service providers, 2 GSM cellular Mobile service providers, 94 VSAT users, 3 rural VSAT users, and 1 rural Internet service providers. (MIS NTA- July 2009).
After all these efforts, the telecommunication and internet penetration rate in Nepal is still very low. According to the Nepal Telecommunication Authority MIS July 2009 report, the total telephone subscribers including PSTN and mobile are 6,069,659 which give the penetration rate of 22.07%. If we see the data service parts then the numbers of subscribers to access data services are 176,024 and the numbers represent from major urban areas and district headquarters.
In this scenario, the distribution of the internet services that are available in the rural areas of Nepal is even more frustrating. According to the tele-center mapping report from the High Level Commission for Information Technology, there are 91 tele-centers established by different organizations all over the country (Source: telecenter.org.np). Most of those tele-centers have connectivity through dial-up connection. However, the fact is that many of those tele-centers are not in operation because of the poor management.
In summary, we can say that there is no Internet, email and IP based telephony services available in majority of the Village Development Committees (VDCs) in rural Nepal with some exceptions. The VDCs that come in the exception category are those VDCs that are located near the big cities like Pokhara, Kathmandu, Biratnagar etc, or those VDCs that have initiated programs by themselves to bring Internet on local level using mostly VSAT technologies provided by STM or Mercantile Communications.