Kathmandu, October 8

The government has moved closer to bringing a strategic partner for state-owned telecommunication company — Nepal Telecom (NT).

The Ministry of Communication and Information Technology (MoCIT) has forwarded a proposal to bring in a strategic partner for NT to Ministry of Finance (MoF) for its approval. “It is necessary to bring a strategic partner for better delivery of telecommunication services to the customers,” said Ramchandra Dhakal, joint secretary at MoCIT.

According to Dhakal, the proposal at present is at the privatisation cell of the Finance Ministry. “After the privatisation cell studies the proposal, it will then forward the proposal to the finance minister and only after that will the document be placed at the Cabinet for its endorsement,” informed Dhakal.

Nepal Telecom, in December 2016, had signed an agreement with Analysys Mason Ltd of the United Kingdom to provide

consultancy services to NT to acquire a strategic partner. The UK-based company had provided consultation service to NT in a bid to select a suitable foreign telecom firm for partnership.

The consultant company had carried out the due diligence audit (DDA) of NT and submitted the audit report to the telecom firm last year. The company had also prepared a tender document to acquire a strategic partner for NT. To prepare the DDA, Nepal Telecom had paid the consultant company a fee of Rs 190 million.

“The government has prepared to divest up to 30 per cent of its shares in NT which will be allocated to the selected foreign strategic partner,” stated Dhakal, adding that the actual figure will be determined by the Cabinet.

In August last year, a number of foreign telecom companies had expressed their interest to be a strategic partner of Nepal Telecom, but the process has been delayed due to the government’s indecision.

Meanwhile, a Japanese telecommunication company named KDDI Corporation had also proposed to the government in August last year to be a strategic partner of NT. The Japanese firm had mentioned it was willing to either acquire a 30 per cent stake of NT and become a strategic partner or just handle the management aspects of Nepal Telecom. However, the government has yet to decide on KDDI Corporation’s proposal.