Policy Amended To Prolong Ncell’s License Term

A policy maneuver has begun to prolong the license period of Ncell, a telecommunications service provider. For this purpose, the Property Management Rules of Telecommunications Service Providers, have been revised for the first time.

“Property Management Regulations of Telecommunication Service Providers Without a License 2079” was introduced, providing the authority to the government to take over the property of telecommunication service after the expiration of their license.

The Ministry of Communication and Information Technology recently published a notice in the gazette amending the regulations. The regulation has been revised to extend Ncell's licensing duration by settling Smart Cell's debts and liabilities.

Despite the fact that the regulations have been changed to target the telecom service provider company, Smart Telecom, the direct advantage will go to Ncell.

According to sources, the revision of regulations is part of the process because Smart Telecom was formed and dissolved with the goal of assisting Ncell.

The updated regulations provide that if a bid is accepted or debts and liabilities are accepted, a service provider with a telecommunications service provider's license will be issued a new license for the remaining duration of the revoked license. This implies that Nepal Telecom and Ncell will be able to compete in the auction to acquire the Smart Telecom license.

As Nepal Telecom is a state-run company and its license period is long, there is no requirement to take on Smart Telecom's debt and obligations. However, if Ncell, whose remaining license duration is just five and a half years, takes over Smart Telecom, the validity period will be extended to ten years. Those who obtain a license from Smart Telecom will have it until 2095 B.S. According to sources, Smart Telecom was dissolved and the regulations were modified to assist Ncell. Ncell's license is set to expire in 2086 B.S. If Ncell acquires Smart Telecom after accepting the debts and liabilities, the license duration will be extended by around 9 years.

Smart's license was automatically revoked after it failed to pay roughly 27 billion rupees in renewal fees and dues. The Nepal Telecommunication Authority took over Smart Telecom in 2080 B.S.

21 billion in state losses
Smart's license was tampered with, resulting in a loss to the state of around 21 billion rupees. Smart Telecom will have to pay the state around 27 billion rupees if it renews its license within the time frame. However, when the license is withdrawn and auctioned, the business that bears the obligation will only have to pay about 6 billion rupees. The revised sub-section in Rule 35 of the regulation has also paved way for manipulating the payment of fees.

It is said that adding a subsection to rule 35 of the original regulation will comply with section 24 of the Telecommunications Act. The topic of attraction in that area has added to the complexity, such as whether or not to pay a new license fee, the permit fee, the renewal fee, and how much will be determined by royalty.

According to sources, Ncell's investors, who further invested money in Smart Telecom, are now involved in the scam.

Since Ncell Axiata Company may have to exit due to the 25-year limit, Nepali investors are making efforts to maintain Ncell in country.

Ncell is a subsidiary of Axiata Group Berhad, one of Asia's largest telecommunications conglomerates. In 2061 B.S., Ncell obtained a 25-year license. According to the Telecommunications Act of 2053, if more than half of the shares are not owned by Nepalis before the license period expires, Ncell's property will be transferred immediately to the government. As a result, it is assumed that all of this is being done to assist Ncell in taking over Smart Cell. Axiata currently holds 80 percent of the company's equity, with Nepalese owning the remaining 20 percent.