No royalty exemption for telecom service providers

HIMALAYAN NEWS SERVICE

KATHMANDU: The taskforce formed to recommend the government on appropriate ways to resolve royalty dispute in telecommunication sector has concluded that the government should not exempt the royalty of any telecom service provider.

The taskforce has forwarded its report to the cabinet in which it has recommended

the cabinet to come hard on the royalty issue, said secretary

at the Ministry of Information and Communications Surya Prasad Silwal.

The government had formed a taskforce led by minister for information and communications Raj Kishor Yadav to oversee the existing royalty structure and recommend

appropriate ways to solve the existing dispute.

The five-member committee was also mandated to oversee the overall royalty system of the broadcasting sector including that of television and radio. All six telecom service providers will be liable to pay royalty dues according to the licence conditions once it gets approved by the cabinet, secretary Silwal informed.

Nepal Telecom and Ncell will be liable to pay a royalty of Rs 20 billion each every 10 years according to the licence condition. UTL will have to clear its royalty dues worth

Rs 1.65 billion by October 3, 2012, to renew its licence, according to the ministry.

Rural telecom service provider STM will be liable to pay four per cent of its annual revenue as royalty every year according to the licence.

The licence conditions for royalty is different for Nepal Satellite Telecom and Smart. Rural service provider Nepal Satellite will have to pay Rs 2.5 million as royalty every year and Smart Telecom will have to pay an amount equal to 90 per cent of the licence fee. Its licence fee is Rs 62.5 million.

The licence conditions for different telecom service providers are different in the country. Nepal Telecommunications Authority — the regulator of the telecom sector —has issued licences based on different sections of the Telecommunication Act.

Instead of using the same section and clause to distribute licence, the authority has used various sections and subsections to issue licences. It has issued licences based on sub-section one, two and three of section 23 under the Telecommunication Act.

It is the regulator’s mistake to issue licences based on different conditions, an official at the authority said.

“However, service providers cannot ask for an exemption of the committed revenue and royalty because they had agreed to clear all liabilities while acquiring their licences.”