A committee formed by the NT board is holding a study to suggest potential areas for investment. The committee is expected to come up with the report within a month. For the last few years, the company has also been planning to set up a subsidiary company to diversify investments in electricity generation, transmission and infrastructure sharing. “The NT board will decide on possible investment areas based on the report of the committee,” said a board member, adding the NT has the capacity to invest around Rs 35 billion from savings it has in various banks.
Two years ago, the country’s largest tax payer amended its memorandum of articles paving the way for investment in new sectors.
The company has so far invested in two hydropower projects—Upper Tamakoshi Hydropower Project and Trisuli 3B Hydropower Project. It has invested Rs 6 billion in the Upper Tamakoshi in loans, and has signed an agreement with the Nepal Electricity Authority to operate Trisuli 3B under the equal share ownership model.
NT is the only public enterprise that has been earning profits and paying large taxes. It posted Rs 36.79 billion revenues and a net profit of Rs 11.60 billion in the last fiscal year. However, with the company paying around Rs 4 billion in licence renewal fees and spectrum charges, the net profit for this year is expected to come down. NT has targeted to generate Rs 36.81 billion revenues this fiscal year.
In January, NT had paid Rs 2.5 billion to the government as first instalment of the licence renewal fee of Rs 20.13 billion. It also paid Rs 480.70 million for using 3G spectrum and Rs 490 million in other frequency fees.
According to NT, new projects like WiMax broadband internet service, 10 million GSM lines project and IP-CDMA’s 2 million lines will help boost its revenue in coming years.
However, with increased telecom penetration, stiff competition with private telecom players, and gradual reduction in service charges, NT will not have a high profit growth like in the previous years.
Its profit growth rate declined by 5.03 percent in the last fiscal year despite a rise in subscriber base. Therefore, NT is looking to diversify of its investment and business, said senior NT officials.
Besides its core telecom business, NT’s other revenue sources are investments in government bonds, power bonds, and fixed deposits in commercial banks. NT is one of the largest and most sought after institutional depositors in the domestic financial market.
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