The Nepal Telecommuni-cations Authority (NTA) has directed the United Telecom Limited (UTL) to acquire a unified licence by clearing any outstanding dues. The NTA’s instruction came at a time when the company is delaying to pick up the permit.

In April last year, the NTA had decided to award the licence to the UTL and Smart Telecom based on their applications. Unified licence allows companies to operate multiple telecom services, including nationwide GSM mobile service, like that of the Nepal Telecom (NT) and Ncell.  

The UTL is currently providing limited mobility and fixed line telephone services based on CDMA-technology. Following government decision to allot a licence last year, the company had paid Rs 102 million  up front in licence fee for the permit.

The government set criteria requires companies to first clear any outstanding dues to acquire the permit. The NTA had recently wrote to the UTL asking it to clear any remaining dues to the government and get the licence. Ananda Raj Khanal, acting chief of the NTA, said they sent a reminder to the company as it had not collected the licence even after the Supreme Court giving a go-ahead to unified licensing provision.

Earlier, cases were filed in the court challenging the NTA’s decisions to implement the unified licence and give the licence to Smart Telecom and the UTL. 

After deliberating for five months, the court in September 2013 passed a ruling to scrap  the cases related to the unified licensing system giving legitimacy to the NTA decisions. The NTA officials said the UTL has been informally saying that they would pick up the licence after getting the court verdict in writing.

The UTL is yet to furnish a bank guarantee of Rs 422.7 million to pick the licence. The bank guarantee allows the company to pay licence fee on instalments, according to the NTA. The UTL will have to pay Rs 47 million each year for the next nine years after getting the unified licence. 

Immediately after the NTA decision in April last year, Smart Telecom had acquired the unified licence clearing all the dues to the government. However, the company has not been able to expand and operate its services due to internal row over share ownership. 

The unified licensing regime was introduced to give a level-playing field to small operators—UTL, Smart Telecom, Nepal Satellite Telecom (NST) and STM Telecom Sanchar. 

The NST has not shown any interest to the unified licence, whereas the reaction of STM Telecom Sanchar—now known as CG Communi-cations—to the issue has been lukewarm of late, a source at the NTA said. With only Smart Telecom getting the unified licence, it has delayed the government’s plan to auction the third generation (3G) spectrum. The spectrum policy requires at least two unified licence holders for the 3G spectrum auction.

“We are mulling over to call the UTL to pick the licence by fixing a deadline,” said the NTA source. Based on the Telecommunication Service Radio Frequency (Distri-bution and Pricing) Policy 2012, the NTA has long been planning to auction the 3G frequency after issuing at least two unified licences. Currently, only NT and Ncell are providing 3G services and they have received 2x10 MHz each at the fee rate of Rs 240 million per year. 

Meanwhile, the UTL incurred a loss of Rs 451.8 million in the fiscal year 2012-13. According to the NTA, the company earned Rs 546.3 million in revenue by selling its services-fixed line, limited mobility and internet and paid Rs 21.85 million (4 percent of total income) in royalty to the government.