The government has announced that it will reduce its shareholding in Nepal Telecom Company Limited (Nepal Telecom) to 66 percent. The plan to sell the remaining shares to the public by mid-December has been put forward through the budget statement for the upcoming fiscal year 2083/84, while maintaining the federal government's shareholding at 66 percent. Finance Minister Swarnim Wagle said that the proceeds from the share sale will be used to make Nepal a 'tech hub'. 

Earlier, there was discussion about changing the government's shareholding in Telecom to increase public participation from 25 percent to 34 percent. There was also a debate from time to time about bringing in foreign strategic partners in Telecom. However, this time the government has taken a clear path to take shares to the public level. Currently, the government owns 91.49 percent of the Telecom, 0.03 percent of the Citizens' Investment Fund, and 8.48 percent of the general public and employees. 

Telecommunications expert Ananda Raj Khanal says that selling an additional 26 percent of shares to the public will mobilize a large amount of capital. ‘The current financial condition of Telecom is not good,’ Khanal said, ‘It has been in operating loss recently. How enthusiastic the general public would be to buy shares in such a situation!’ Pointing out that Telecom has a huge liability to pay license renewal fees of Rs 20 billion within the next five years, Khanal said that it is necessary to resolve the policy related to renewal fees. 

‘On 28 Baisakh 2081, Nepal Telecom’s 25-year mobile service license expired, and the 20 billion renewal fee was to be paid only after 10 years, but the Telecommunications Authority gave Telecom a new license for 5 years,’ Khanal said, ‘This has added a huge financial liability of paying another Rs 20 billion for license renewal within 5 years. An additional Rs 40/45 billion is needed for the latest technology like 5G. Where can the company get money for renewal and infrastructure expansion when income is decreasing and expenses are increasing?’ 

Khanal, who said that despite the company operating at a loss, Telecom is distributing 30 percent cash dividend to shareholders by showing profit from interest on bank deposits, called it a ‘strange situation’ in the country. ‘If this problem of 20 billion is not addressed and dividends are distributed with the money coming from interest, there is a risk of the company closing down in the future,’ he said. ‘In such a situation, would it be appropriate to float Telecom’s shares on the market?’

Efforts are being made to amend the Telecommunications Act to clarify the long-confused provisions on license renewal, share structure, and foreign investment in the telecommunications sector. This time too, Finance Minister Wagle has said that the bill will be presented in Parliament. Although discussions have been going on since 2064 BS to amend the act or bring a new bill, Khanal pointed out that this is not easy as many pending and controversial cases involving Ncell, Smart Telecom, Nepal Telecom, internet service providers, and infrastructure companies are involved in it. "If someone does not dare to address the current problem properly through this bill, it may cause a major accident instead of improving it," Khanal said.