The government is set to implement the findings from the investigation into the infamous Axiata’s sale of its 80% of Ncell stakes for $50 million. The investigation committee’s report will be sent to the concerned bodies for their implementation. The cabinet meeting sat on Sunday (February 18, 2024) made the striking decision.
The report in concern was the result of over a month of investigation. The investigation committee led by former attorney general Tankamani Sharma submitted its report on January 29 to Prime Minister Pushpa Kamal Dahal “Prachanda”. Besides Sharma as the coordinator, the committee comprised the secretary of the Nepal Government Fanindra Gautam, joint secretary of Finance Minister Ritesh Kumar Shakya, joint secretary of MoCIT Baburam Bhandari, and the Chairman of the Institute of Chartered Accountants of Nepal Sujan Kumar Kafle. To recall, on December 01, Axiata announced its sale of stakes in Ncell to Spectrlite UK citing a challenging business environment in Nepal.
Axiata sold decided to sell its 80% of equity stakes in Ncell to Spectrlite UK and exit Nepal
Check out: Latest Ncell Data Packs With Volume, Price, and Code
Government to act on Axiata sale of Ncell stakes as per the investigation report
In its report, the high-level investigation committee listed 10 recommendations and suggestions. The investigation committee concluded that Axiata’s stake sale in Ncell didn’t follow the prevalent laws of Nepal. It said that the Malaysian telco group and Spectrlite UK both failed to send and obtain permission for the transaction of Ncell shares. They also didn’t send applications to pre-inform the regulatory bodies.
The government is also entertaining the possiblity of bringing Ncell under state ownership after its license expries in 2029.
Likewise, the committee questioned the ability of the shares’ buyer Spectrlite UK’s technical, financial, and managerial efficiency. It concluded that the Axiata-Spectrlite UK’s deal can’t be accepted in the current scenario. On the other hand, Ncell has submitted its sale and purchase details to Nepal Telecommunications Authority (NTA). In its statement, the telco firmly stated that the deal between Axiata-Spectrlite UK fully complies with the prevailing laws in Nepal.
Earlier, the State Affairs and Good Governance Committee asked the government to bring Ncell under government ownership. The private company’s mobile license is expiring in 2029 AD.
Committee skeptical about Spectrlite UK’s investment
The report also prefigures the possibility of crossholding between the companies, buyer’s source of investment, background, etc. Axiata exited Nepal blaming the unfavorable business conditions as one of the primary reasons for its decision to leave. This statement didn’t convince the government or the stakeholders. The report also recommended the government make its final decisions taking into consideration how Axiata’s sale of Ncell shares impacts foreign investment prospects in Nepal’s telecom industry in the future, the effect on foreign investment, etc.
Government gears up to implement the recommendations it received from the investigation committee on Axiata’s sale of stakes in Ncell. This could potentially affect Axiata-Spectrlite UK deal.
The government will now officially start implementing the recommendations from the investigation committee. However, it will be interesting to see if the government lets the Axiata-Spectrlite UK deal be upheld. On the other hand, Axiata Group has removed the Ncell brand from its website.
Also read: Ncell Lists “Facts” Regarding The Axiata-Spectrlite UK Deal
Axiata’s sale of Ncell stakes could be in turmoil
Now, it will be up to the government, Communication Ministry (MoCIT), NTA, and other government bodies to decide on what happens to the Axiata-Spectrlite UK deal for Ncell stakes.
Meanwhile, it must be noted that Ncell remains a vital service provider for Nepal’s telecommunication industry. The company has played a leading role from the private sector in propping the country’s telecommunication. Ncell’s 4G, VoLTE, eSIM, and other digital services have promoted digital inclusion and played a key role in the digital transformation of Nepal. But not just with service, Ncell has also remained at the forefront with its various CSR initiatives such as Telemedicine with Dhulikhel Hospital, community development, emergency alerts, several health, education, etc.
Nepal’s telecom companies are indeed facing several challenges. The recent financial reports from both Nepal Telecom (Ntc) and Ncell corroborate the case. Likewise, frequency policy, renewal charges, and other factors are also very crucial for service providers. The next few days and weeks will show how the government proceeds on Axiata’s Nepal exit. It is also one of the early key tasks for NTA’s new chairman Bhupendra Bhandari to make decisions about this controversial transaction.
Do you think the government should have courted Axiata to persuade it to continue its business in Nepal? if you think there is an urgent need to make amendments to the governing telecom regulations, then do share with us in the comments below.
