State-owned Nepal Telecom has cancelled the bidding process for nearly Rs5 billion telecom billing system, effectively removing China’s telecom giant Huawei from the race to develop the system.

Huawei had technically qualified for the bid on August 25 last year, along with another supplier.

The cancellation comes as Nepal Telecom prepares to roll out an ultra-fast 5G network in standalone mode, ending its long-standing partnership with Huawei, which developed the country’s 3G and 4G network infrastructure.

Publishing a notice on Sunday, Nepal Telecom officially cancelled the bid for the supply, delivery, installation and commissioning of a convergent real-time billing and customer support system. The notice was published in the state-owned Gorkhapatra daily. The decision made on Friday was made public on Sunday.

Reacting to the notice, Huawei representatives told an informal gathering of reporters on Sunday that the cancellation had come “without citing any reason”.

“Although the tender process was initiated to upgrade this system through transparent competition and defined technical standards, repeated obstructions have stalled the process, creating serious barriers to Nepal Telecom’s digital transformation plan,” a Huawei source said on condition of anonymity.

Rabindra Manandhar, spokesperson for Nepal Telecom, told the Post that there were clauses in the bid documents that did not meet the requirements of Nepal’s public procurement law.

“Huawei and Whalecloud were the two shortlisted bidders. Whalecloud Technology, which is largely owned by Alibaba and works closely with ZTE, was also disqualified at the technical proposal stage,” Manandhar said.

Nepal Telecom officials said Huawei representatives had initially been invited to open the company’s financial proposal after it cleared the technical evaluation. However, the Ministry of Communication in the Sushila Karki-led administration ordered the process to be halted, saying there was something fishy in the bidding.

“After that, the financial proposal was not opened,” Manandhar said. “We have cancelled the bid. The decision was made by the management.”

The company now plans to issue a fresh tender.

“We will go for a re-tender and take suggestions from stakeholders before announcing it,” Manandhar said, adding that Huawei would be free to participate again.

“Options are now open for Huawei to take part in the retendering process,” he said.

Some officials involved in the process said concerns were raised that Huawei and Whalecloud were linked, potentially limiting competition and creating a monopoly. Such a situation, they said, could lead to outdated or low-quality services and lock Nepal Telecom into using the same vendors over the long term.

A telecom billing system manages the entire financial lifecycle of telecom services—voice, data and messaging—by collecting usage data, applying tariffs and taxes, generating customer invoices, processing payments and producing financial reports. Automating this process is critical for accurate revenue management for operators such as mobile and internet service providers.

According to the Management Information System report of the Nepal Telecommunications Authority, Nepal Telecom had 15.92 million subscribers as of mid-December last year, accounting for 53.5 percent of the total market.

At present, Nepal Telecom’s billing operations are handled by Asia Info Linkage Technologies, another Chinese firm. In December 2011, Asia Info was awarded the billing system contract for 10 years. The contract was extended by one year in 2021 and again extended for five years in 2022.

Insiders say while the outdated Asia Info system has affected service reliability, Nepal Telecom’s repeated extensions of the contract raised eyebrows.

In June last year, the Commission for Investigation of Abuse of Authority filed a corruption case at the Special Court against Nepal Telecom Managing Director Sangita Pahadee, former managing director Sunil Paudel and 16 others over alleged irregularities in procuring the billing system and its annual maintenance contract.

The officials caused losses to the public utility by determining “unnatural price rates” while procuring services from Asia Info Linkage Technologies, the anti-graft body said.

Following large-scale Gen Z–led protests and the formation of a new government, Nepal Telecom temporarily halted the bidding process on October 24. After the halt, the Ministry of Communication and Information Technology formed a study committee on October 30.

Some describe the cancellation as being driven by “geopolitical influence”. Rupak Sapkota, a foreign policy expert, said the interim government is mandated to hold elections, but its mishandling of critical issues raises concerns.

“We all know China has advanced technology, but the way decisions are being made to exclude Chinese companies from one project after another shows something is cooking,” Sapkota said.

Telecom officials familiar with the matter said the decision came amid geopolitical pressure, particularly from the United States and India.

The move also follows Beijing’s recent expression of concern over Chinese entities being implicated in the $215.96 million China-funded Pokhara International Airport project, which is under a corruption investigation.

Former Chinese ambassador to Nepal Chen Song, who recently completed his three-year term in Kathmandu, raised reservations during a farewell call on Prime Minister Karki over Chinese firms facing allegations in the Pokhara airport case.