Nepal Telecom (NT) has applied to renew its mobile licence by fixing the renewal fee on its own after getting tired of waiting for the government to do so. With the deadline approaching fast, the state-owned telecom giant rushed to get its GSM permit renewed on Friday by depositing 90 percent of the issuance fee which comes to Rs 189 million.   

Telecommunications laws require companies to apply to the Nepal Telecommunications Authority (NTA) for a renewal of the licence three months before it expires. Since NT’s licence expires on May 11, it needs to apply for a renewal by Tuesday.

NT spokesperson Guna Keshari Pradhan said that since the NTA had not specified the amount they needed to pay as renewal fee, they paid Rs 189 million as per their board decision. “The amount is 90 percent of the licence fee of Rs 210 million,” she added. Under the present laws which are being reviewed, NT would have to pay Rs 20.13 billion to renew its permit.   

NT said that the Rs 20.13 billion renewal fee was only for the first renewal of the mobile licence. Two years ago, the Public Accounts Committee (PAC) had directed the government to collect the stipulated renewal fee for the first renewal and decide the fee for subsequent renewals based on international practices. PAC’s order had made NT hopeful that the charges would be slashed. The first renewal allows companies to operate the service for a period ranging from 11 to 15 years

This is the second time the company will be renewing its GSM mobile licence which will allow it to continue providing the service till May 2019. After NT paid the renewal fee as per its legal interpretation, the NTA on Sunday started internal discussions regarding the issue. Ananda Raj Khanal, acting chief of the NTA, said that since they had three months to renew the licence, a proper decision would be reached regarding the fee rate by that time. “There will be discussions and studies as per PAC’s instructions,” he added.

The issue of the second renewal fee holds huge importance as it will also be applicable to other telecom companies-Ncell and Smart Telecom. After five years when Ncell’s licence comes up for renewal, it will have to pay whatever the government charges NT this year. Similarly, Smart Telecom, which acquired a unified telecom licence last year, will have to pay the same amount after 14 years. If United Telecom Limited (UTL) acquires a unified licence this year, it will also be required to pay the set renewal fee after 15 years.

After obtaining a licence for the first time, operators are allowed to operate their services for 10 years; and after that, they have to get their licences renewed after every five years. NTA officials said that with NT fixing the fee based on its own reasoning, they had two options — renew the licence by accepting the fee or fix a new rate and tell the company to pay it before May 11.

Five years ago, the NTA had renewed NT’s mobile licence “provisionally” collecting the same amount of Rs 189 million for the first renewal, which had resulted in a loss to the government as it missed collecting a fine. The existing telecommunications rules allow the NTA to impose a fine of 15 percent of the renewal fee if the licence is not renewed three months before it expires.

The NTA said that it had not been able to fix the fee as the task was not only its responsibility. As per the suggestion of PAC and a cabinet decision, the NTA has been collecting the fees for NT’s first renewal in instalments. Ncell, a private company, has also been paying the licence renewal fee for 10-15 years in instalments in advance although its service period has not crossed 10 years. Its 10-year GSM mobile licence ends in August 2014.

Earlier, the Ministry of Information and Communications and the NTA had planned to visit four countries-India, Bangladesh, Malaysia and Bangkok-to study the rules there regarding renewal fees. However, the tour was later cancelled following criticism and failure to get appointments with a number of foreign officials with whom meetings had been planned.