Ncell, on the other hand, has argued that instead of nationalization, the country would benefit if the license is reissued or renewed after 25 years.
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Private sector telecommunications service provider Ncell has once again sent a letter to the Office of the Prime Minister and Council of Ministers, requesting a review of government decisions, conditions, and amendments to the Telecommunications Regulations. Stating that there had been no response to the letter sent last Poush, the company said on Wednesday that it had corresponded for the second time, urging the correction of provisions that are detrimental to foreign investment and the telecommunications sector.
Ncell has demanded a review of such decisions, amendments, and conditions specified in the license, arguing that they are not in the interest of foreign investment and the telecommunications sector, and has asked the relevant authorities to issue necessary directives. Previously, on 23 Poush 2082, it had submitted a letter to the relevant ministries, departments, and the Nepal Telecommunications Authority under the then government led by Prime Minister Sushila Karki, requesting a review of these decisions and conditions.
The letter to the Prime Minister’s Office states that the government’s decision on 6 Falgun 2080 regarding the purchase and sale of shares of Ncell’s parent company, as well as its documentation and approval, was against the law, and that the conditions set by the Telecommunications Authority at the time of license renewal based on that decision were unfair. It also mentions that the tenth amendment to the Telecommunications Regulations 2054 included retroactive provisions, and that the Cabinet decision of 13 Bhadra 2081 was also not in accordance with the law. Ncell claims that these decisions directly restrict constitutionally guaranteed fundamental rights and are contrary to the prevailing Foreign Investment and Technology Transfer Act 2075. The company has requested a review of decisions and regulatory provisions that are not in the overall interest of foreign investment and the telecommunications sector.
Some time ago, in a conversation with Kantipur, Minister for Communications and Information Technology Bikram Timilsina said he was not aware of Ncell’s letter and that decisions regarding the company’s future would be made according to the Telecommunications Act. He stated that it is clear Ncell will become a government company after Bhadra 2086.
“According to the Telecommunications Act 2053, it is now time to seriously plan on this matter. I have already conveyed that message to the concerned company,” he said. “The transition must be managed in accordance with the spirit and letter of the law. I have also given my opinion to the Telecommunications Authority on this matter. The concerned company is aware of this.”
Minister Timilsina said that no one has the authority to bypass the law, that the service provider must operate the company in accordance with the law, and that there is no complexity in this. “According to the provisions of the law, preparations must now have begun on how to manage this transition and how to bring it under government ownership,” he said. “Even if preparations have not started, they will now begin; no one has the authority to bypass the law.” He indicated that, under the existing law, the company must be transferred to the government in three years and some additional time, and that the company leadership should consider how to operate the company until then.
Ncell, on the other hand, has argued that instead of nationalization, reissuing or renewing the license after 25 years would benefit the country. It claims it will develop advanced telecommunications services like those in developed countries using new technologies such as 5G and AI. Ncell has also presented the option to the government of increasing local ownership in the company by issuing primary shares (IPO).
According to telecommunications policy, companies with more than 50 percent foreign investment are to come under government ownership after the 25-year license period expires. Ncell has proposed to the government to reduce the foreign investment share in the company to 50 percent or less by selling shares to the public through an IPO, thereby making the company majority Nepali-owned.
Ownership transfer in limbo
After Axiata Investment (UK), the investor in Reynolds Holdings, which holds 80 percent of Ncell’s shares, decided to exit Nepal, Spectrlite UK signed an agreement to purchase those shares on 15 Mangsir 2080. After a dispute arose over not obtaining the required prior approval for the share purchase and sale as per the Telecommunications Regulations, the Telecommunications Authority has not recognized this transaction, stating that it cannot grant approval for the status quo.
The then government had formed a high-level investigation committee under the coordination of former Auditor General Tankamani Sharma to study the purchase and sale of Ncell’s ownership. Based on the report prepared by the committee, the Cabinet also decided that it would not be appropriate to accept the share purchase and sale agreement as it stands. In accordance with the instructions received based on the Cabinet decision, the Telecommunications Authority renewed Ncell’s license for five years with various conditions, effective from 16 Bhadra 2081.
For the third renewal of the mobile service license, the remaining renewal fee must be paid in three installments at the rate of Rs 5 billion per year, with interest and installment amounts to be paid at an annual rate of 10 percent. To ensure continuity of service, if the license holder’s technical, financial, and managerial capacity is confirmed, after the 25-year license period expires, the ownership of land, buildings, machinery, equipment, and structures related to telecommunications services will be transferred to the Government of Nepal as per Section 33 of the Telecommunications Act, 2053. At the time of license renewal, one of the conditions was that there should be no change in the share ownership structure of the service provider company as it existed at that time.
