Nepal Telecommunication Authority (NTA) has revoked the license of UTL (United Telecom Limited). The telecom regulator notified of the company’s license revocation via a notice. Along with UTL, two other service providers’ operational licenses were also terminated.
In addition to UTL, the authority also terminated the operating licenses of Koteshwor Max Net Solution Pvt. Ltd. and Bharatpur Chitwan Network Pvt. Ltd.
UTL first received the license for CDMA mobile service and email service in 2060 Kartik 05. However, over the years, the company was embroiled in financial controversies while its services could never expand translating to commercial viability. To say the least, the company has remained unfunctional for years. It’s even safe to say that the company was not expected to come into commercial telecom service operation once again.
Likewise, Max Net and Chitwan Network received their license from NTA on 2075 Mangsir 06, and 2075 Mangsir 12 respectively.
The reason behind UTL license revocation
The authority has stated that the companies’ licenses were terminated because they failed to submit renewal fees and applications as required by sub-section 5 of section 25 of the Telecommunication Act, of 2053. For the same reason, the companies’ licenses were automatically canceled. On UTL’s part, the company faced a financial crisis for a long which adversely incapacitated its service plans.
UTL had even received a unified license which enabled it to provide nationwide GSM service. With the unified license, the private telco could provide 4G services which brings both high-speed data and HD voice. However, the company was only offering WLL service through the CDMA network meaning it was providing basic voice telephony and data services. Unfortunately, its economic crisis and inability to fetch investment to keep afloat deepened its troubles over the years.
The authority has mentioned that as per Sub-Section 5 of Section 25 of the Telecommunications Act, 2053, UTL’s license was automatically revoked after it couldn’t pay for the renewal within the specified time.
In the meantime, NTA has warned UTL and other companies of action if they fail to contact the authority. The companies now will have to contact NTA within 30 days or face actions as per the prevailing act.
It may also interest you: Frequency bands in Nepal for Mobile | 2G, 3G, 4G, 5G Cellular Spectrum
After NTA revoked UTL license, the frequencies will go back to the authority again
Recently, Smart Telecom also faced license revocation for failing to submit its renewal fees to the authority. Now, its assets are under assessment at NTA. Recently, NTA made a provision allowing it to take back unused frequencies from telecom companies. UTL possesses 850 MHz, 900 MHz, and 1800 MHz band frequencies. But they remained unused without any network associated with it. NTA will now proceed to take back the spectrum and allocate it to another willing service provider, most probably via spectrum auction.
In name, there are many telecom operators in Nepal but some are in name, some in speculation, while only two are in operation. UTL now joins Smart Cell for the list of those who lost their operating license.
The broader picture
Smart Cell and UTL both promised telecom services across Nepal. With the ambition to bring more affordable services, they came and failed. Nepal continues to be a duopoly of Nepal Telecom and Ncell for telecom services. However, more recently, Axiata sold its assets in Ncell and exited Nepal citing adverse business challenges. Axiata’s exit has even sparked some questions regarding the future of Ncell. Unfortunately, these events point to the challenges telecom companies face in Nepal.
While some of the issues may be out of reach for the government such as small market and economic potential, but allowing more companies a competitive playing field for the service should be at the core for policymakers. In Nepal, a telecom operator has to pay Rs 20 billion for the renewal of a license. Find all of the challenges of a telecom operator in Nepal.
Do you think such regulations contribute to worsening the telco industry of the country? You can leave your opinion in the comment box below.
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