NTA terminates the optical fiber contract with Smart Telecom

NTA (Nepal Telecommunication Authority) scraps an optical fiber laying contract with Smart Telecom. two years before, the telecom operator had got the contract to lay the optical fiber along the Mid-hill highway in SudurPaschim and Karnali province. As there was no any significant progress in the project, NTA took the decision to terminate the project worth billions.

Smart Telecom got the contract in September 2017 to complete the works within 2 years. More than 2 years gone by,  the telco could not accelerate the project works. They had also crossed the deadline with no improvement till now.

Information Superhighway

There are three such optical fiber laying projects, in the Mid-hill information highway. Read What is information superhighway and why Nepal needs it? They are divided by the optical fiber laying section into different provinces. They are:

• Province 1, 2 and 3: 2376 km
• Province 4, 5: 2100 km
• Sudhur Paschim and Karnali (Province 6, 7): 2500 km

Similarly for the optical fiber project along Province 4 and 5, another telco, UTL had got the contract in April 2017. With the same reason as Smart Telecom, NTA terminated the project with UTL citing no substantial progress.  With the scrap of these two projects, the optical fiber laying works worth of billion of Rupees have become uncertain for now.

As known, Smart Telecom laid 20 km out of the total 2500 km optical fiber in all these periods.

NTA had also awarded one of the projects to lay optical fiber along Province 1, 2 and 3 to Nepal Telecom. Prime Minister himself inaugurated the project and the laying works are known to be underway.

NTA funded all of these three projects under RTDF. There is a huge fund in RTDF, as the telcos need to pay 2% of the annual income to this fund, every year.

The regulator has written a letter to Smart Telecom on October 20, 2019, to notify the cancellation of the project. Smart Telecom had got Rs 600 million in advance to commence the laying works. NTA has also asked the respective bank to freeze the bank guarantee, which is a normal process.

As known, NTA is willing to award the optical fiber laying project to Nepal Telecom, which already has another fiber project running.