Nepal faces widespread internet outages over India payment dispute

Internet providers in Nepal warned Friday the Himalayan republic was facing widespread outages because of payments owed to Indian companies, a day after service disruptions that affected millions of people.

Several private internet companies saw their customers forced offline on Thursday night when their upstream partners in neighbouring India cut connections citing non-payment, the Internet Service Providers Association of Nepal (ISPAN) said.

Data from internet outage monitor Netblocks showed 18 Nepali internet providers had their bandwidth severely curtailed or cut entirely during the five-hour outage.

"It may happen again. It is not in our hands," ISPAN chief executive Suvash Khadka told AFP.

"Internet is a vital service and the government needs to respond."

Broadband providers owe about three billion Nepali rupees ($22.5 million) to Indian vendors but have not been able to transfer the money.

Nepal's government has refused to give the necessary approval to transfer the funds out of the country, saying that the internet providers must first pay outstanding taxes -- a dispute that dates back years.

Private internet providers say that the legal framework governing their businesses exempts them from those taxes.

Nepal has more than 10 million subscribers to private internet companies, according to a report last year by the Nepal Telecommunications Authority.