Kathmandu, September 21

Nepal Telecommunications Authority (NTA) is preparing to issue unified licence to United Telecom Ltd (UTL) soon. The company has paid the third instalment of dues of committed royalty, clearing a hurdle to obtain the permit.

UTL recently cleared Rs 204 million as third instalment of its outstanding committed royalty dues that was supposed to be paid during the last fiscal year 2014-15. After being unable to pay the sum as required by the government provision, the company had sought additional time of 60 days that expired on September 14.

“UTL paid the third instalment of the committed royalty within 60 days of the time sought,” said Santosh Paudel, chief of the Licence Division of NTA. He, however, said that there are still some issues to be resolved that are related to roll-out plan and the remaining five instalments of the committed royalty dues.

In 2012, the government had implemented a provision that had allowed 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. Even after the clearance of the third instalment of the committed royalty, UTL still owes more than Rs one billion to the government — its outstanding dues from the first 10 years for service operation (2002 to 2012).

UTL, the first private sector telecom company of the country, had paid required licence fee including first instalment of licence renewal fee of Rs 50 million about four months ago and applied for the unified permit.

“Hopefully we will be able to issue the unified licence to UTL within two weeks by resolving the complexities,” said a high level official at NTA. The official said that they currently are in confusion over what to do with the issue of remaining dues of committed royalty after issuance of the unified licence.

As per the condition set for the unified licence, any company obtaining the licence has to clear all outstanding dues. This provision was implemented by publishing a notice in the Nepal Gazette before the government introduced rules to clear dues in eight instalments within eight fiscal years. The unified licence has a validity of 10 years.

According to NTA, UTL’s service roll-out plan to expand telecom service after getting the permit is also not satisfactory. In its plan submitted to the authority, UTL has stated that it would expand mobile service to around 55 districts in two phases, which as per NTA is contradictory to its previous plan to take the service to 60 districts.

Unified permit allows UTL to operate multiple telecom services including GSM mobile, the popular mobile service. At the same time, its annual fee liability to the government will also increase because there is a provision in the frequency policy that requires operators obtaining unified licence to start paying licence renewal fee of Rs 20.13 billion in advance in each fiscal year in instalment, which keeps increasing each fiscal year till the 10th year.