KATHMANDU, SEP 18 -The Supreme Court (SC) on Tuesday scrapped the cases related to the unified telecom licence, paving the way for the government to move ahead with the new telecom licensing regime intended to allow all small telecom companies to operate nationwide GSM cellular mobile service.
A division bench of Acting Chief Justice Damodar Prasad Sharma and Justice Tarka Raj Bhatta took the decision scrap the seven writ petitions.
With this, the Nepal Telecommunications Authority’s (NTA) decision to issue the unified licence, spectrum policy and an ad-hoc committee formed to make policy-level decisions at NTA have received the legal backing.
“The decision has opened the door for big investment in the telecom sector and its further development,” said Ananda Raj Khanal, acting chief of the NTA. He said they would now be able to auction the 3G and 4G spectrums, besides bringing new mobile operators in the market.
Tuesday’s decision of the court means there will be greater competition in the GSM segment, making the tariff cheaper and ultimately benefiting the consumers. Currently, Nepal Telecom (NT) and Ncell are proving the GSM mobile service.
Three small telecom companies—Smart Telecom, United Telecom Limited (UTL) and STM Telecom Sanchar (now known as CG Communications)—had applied for the unified licence. Of them, Smart Telecom acquired the licence in April, immediately after the NTA decided to issue it the licence, while UTL had not been able to acquire the licence due to the cases under the court’s consideration.
The NTA had refused to issue the licence to CG Communications (a telecom venture of Chaudhary Group), citing its failure to meet the government-set criteria. After that, CG also filed a case in the SC, complaining “bias treatment” and demanding annulment of the decision to issue the licence to Smart Telecom and UTL. It had also been revealed that the NTA had decided to issue the permission without following the criteria set in the Nepal Gazette.
According to the Gazette, only the companies that have completed service expansion to government-designated areas and that have cleared outstanding dues are eligible for the unified licence. However, the NTA board on April 11 decided to issue the licence to Smart Telecom despite the company not having completed the required service expansion.
Immediately after the NTA started preparation to issue the licence, the first case was filed in December last year by Advocate Uttam Shrestha.
A senior official at the Nepal Telecom (NT) said new licence system might give choices for the customers, but would also promote unhealthy competition given the small market. “I doubt is all companies will be able to make profits and pay such a huge government fees,” the official said.
The operator receiving the licence has to pay a licence fee Rs 357.5 million up-front and Rs 20.13 billion as licence renewal fee within the next 10 years on instalment basis. Besides, the licencees also have to pay 4 percent royalty, 2 percent Rural Telecommunication Development Fund and frequency fees to the government from their annual income.
The government introduced the unified licencing provision last year, with an aim to provide a level playing field to all six telecom companies. With the ad-hoc committee of the NTA now receiving legitimacy, NTA officials said the issuance of the licence to eligible companies will also resume soon.
Numerous issues including approval for equipment import for Ncell and STM Telecom, licence cancellation and licence renewal of internet service providers had remained pending due to the cases, according to the NTA.
Although Smart Telecom has acquired the government permission, it had not been able to work aggressively for network expansion due to cases. The company has announced it will invest around Rs 28 billion for extending mobile service network across the country.
As UTL’s network is based on CDMA technology, it too will require huge investment for making its network capable for GSM mobile.
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