Kathmandu, August 29

The government’s plan to issue unified licence to United Telecom Ltd (UTL) has received a setback due to the government’s own contradicting rules and unsatisfactory service rollout plan from the company. As a result, UTL has failed to get the permit from the telecom regulator even though it paid the required fees three months ago.

After repeated instructions from Nepal Telecommunications Authority (NTA) to pay the fees and collect the licence, UTL — the first private sector telecom company — in May had paid over Rs 302 million for the licence and the first instalment of licence renewal charge to take the permit. Now, NTA is taking more time to issue the unified licence citing legal complexities, among others.

“UTL is yet to come up with a convincing service rollout plan and clear the dues of the committed royalty,” said Santosh Paudel, chief of Licence Division of NTA. “It has not paid Rs 200 million-plus annual instalment of outstanding dues of royalty which was supposed to be cleared by mid-July this year.”

A provision implemented in 2012 requires UTL to clear its old dues of committed royalty by paying Rs 204 million every year for eight years before the end of each fiscal year. To clear the dues of last fiscal year, UTL had also sought additional time of two months. Following the plea, NTA had written to the Ministry of Information and Communications (MoIC) seeking a solution but the ministry is yet to respond.

UTL has been failing to clear its dues as per the pre-set schedule each year. In 2012, based on the recommendation of the then minister for Information and Communications Raj Kishor Yadav-led taskforce, the Financial and Infrastructure Committee of theCabinet had decided to collect committed royalty and licence renewal fees from telecom operators on eight-year instalment basis.

Out of eight instalments, UTL has so far cleared two instalments of fiscal year 2012-13 and 2013-14 by paying over Rs 400 million. NTA officials said that the company still owes over Rs 1.5 billion as committed royalty, which is the outstanding dues from the first 10 years for service operation.

UTL had entered domestic telecom market in 2002 and its licence was renewed in 2012 after the implementation of instalment provision.

As per the condition set for taking the unified licence, any company obtaining the licence has to clear all outstanding dues. “Issuance of unified licence to UTL has been delayed due to contradicting rules,” said an official at NTA. “Despite being a regulatory body, we are seeking suggestions of MoIC so that there is no controversy later.”

Meanwhile, UTL has laid off 40 per cent staff after a long dispute with its workers. According to the Department of Labour, the company laid off 58 employees through voluntary retirement scheme and two workers resigned after the management-workers dispute. The company has been planning to increase investment and operate mobile service nationwide after getting the unified permit.