Nepal Telecommunications Authority (NTA) has refused a request made by Ncell for its third license renewal. The private telco had submitted Rs 4 billion with a formal letter requesting the authority for an installment payment option and to renew its mobile service license. However, the denial could strike a big blow to the private telco as it dealing with economic hardships lately.
On Monday, Jestha 14, Ncell submitted Rs 4 billion in license renewal fees. the failure to pay in a lump sum already means that it has to bear an additional Rs 3 billion in fines. NTA spokesman Santosh Paudel says that if Ncell pays Rs 16 billion and Rs 3 billion fine by Bhadra 16, then its license will be renewed. He also made it clear that the failure to meet the payment requirement means Ncell’s service license will face revocation except for some decisions by the council of ministers.
The private sector mobile operator had to pay the license fee for its third renewal by Jestha 15. And since there’s a public holiday on Jestha 15 for Republic Day, the company made the payment on Monday Jestha 14. Ncell’s license is expiring (if not renewed) in Bhadra. Now, if the company doesn’t pay all the amount before Jestha 15, it will be subject to a fine of an additional Rs 3 billion which would total a massive Rs 23 billion. The company paid Rs 3.4 billion excluding taxes depositing the amount in NTA’s account.
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Ncell cites testing times for the industry to pay Rs 20 billion in one lump sum
Ncell requested NTA to grant it an installment payment option citing a dire time for the telco industry. The telco saw its former owner Axiata exit Nepal selling all the shares to Spectrlite UK on the grounds of the challenging business environment. Also, the financial reports of telecom companies don’t reflect an encouraging trajectory. So there might be weight to Ncell’s assertion.
A Ncell official said, “In previous times, the regulator gave us a facility to pay Rs 20 billion in five installments with Rs 4 billion being at a time. We asked for the same facility this time, but the regulator denied it. NTA and the Ministry of Communication, Information and Technology (MoCIT) are avoiding the matter stating that it’s not within their jurisdiction to grant installment payment options. Creating such a deadlock will lead to the collapse of the telecommunication industry. Ncell’s collapse also means the same for NTA, Nepal Telecom (NTC), and the entire telecommunication industry.”
The authority also didn’t provide an installment facility to Nepal Telecom which paid the Rs 20 billion amount in one lump sum just earlier for its third license renewal. Ncell, on the other hand, maintains that its difficult situation doesn’t allow for such flexibility to make huge payments at once.
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The government finds it risky to grant Ncell installment option for third term license renewal
As Ncell calls for more lenient treatment from the government, the authority and MoCIT officials believe that Ncell could have the same fate as Smart Telecom if it’s allowed installment payment basis.
Allowing Ncell an installment payment facility might make it “irresponsible”
An official from the Communication Ministry stated, “After paying once or twice, Smart stopped fulfilling its installment amount and its license suffered automatic revocation. Ncell may also hesitate to pay its dues as it would come under state ownership later,” he added, “Therefore, it’s risky to provide Ncell with an installment payment facility. It makes the company irresponsible.”
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Ncell is reaching 25 years of service in Nepal
Even after its current license is extended, Ncell’s license will expire in 2086 BS after 25 years. As per the Telco Act of Nepal, any telecom company with over 51% foreign investment must come under government control after 25 years. The law applies to Ncell too. In late 2080, Axiata Berhad sensationally sold its entire 80% equity stake in Ncell to Spectrlite UK. So, Ncell has an overwhelming majority of stakes from a foreign firm. It received a license for its GSM cellular services on Bhadra 16, 2061 BS.
Putting its life after 2086 aside, Ncell will now need to pay a total of Rs 19 billion including a fine to renew its license otherwise, its license could be revoked. Now, the telco could count on the council of ministers for relief. How do you see the tough stance from the government regarding the demand from Ncell for installment payment for its third-term license renewal? Should the government be lenient on Ncell as the telco industry is not in an affluent state currently? Do offer your opinion in the comment box and you can also reach out to us via our social media handles.
