Ministry, NTA in quandary after CIAA directive

KATHMANDU, MAR 29 -The Commission for Investigation of Abuse of Authority’s (CIAA) latest directive that has barred the government from implementing the new spectrum policy has put the Communication Ministry and Nepal Telecommunications Authority ( NTA ) in a quandary.

The CIAA directive, according to Communication Ministry sources, has stalled work on spectrum allocation, including the planned issuance of the unified telecom licence, auctioning 3G spectrum and re-farming radio telecommunications frequency.

The officials said the CIAA instruction has created an uncertainty in the telecom sector as the country now does not have a policy to guide spectrum allocation and collection of frequency fees from telecom companies.


The directive will also hit three telecom operators—United Telecom Limited, Smart Telecom and STM Telecom Sanchar—who have applied for unified licence to launch nationwide GSM mobile service.

Although the CIAA directive does not bar NTA from issuing the unified licence, but it restricts the regulator from assigning the required spectrum.

The anti-graft body asked the NTA not to implement the “Radio Frequency Distribution and Pricing Policy 2012”, stating it was investigating inconsistencies on the provision of collection of licence renewal fees from telecom companies.

According to CIAA, there are discrepancies in the licence fee collection fee provision, with two modalities in existence.

The spectrum policy that came into effect five months ago has provisioned collection of licence renewal fee of Rs 20.13 billion from ‘basic telecom service’ operators in 10 years on instalment basis. However, the Cabinet in September, 2012, decided to collect the licence fee from Nepal Telecom (NT) and Ncell in eight annual instalments.

As per the spectrum policy, the government will collect Rs 3.50 billion of the total licence renewal fee of Rs 20.13 billion by the eighth year of service operation from unified licence holders, and the remaining Rs 16.63 billion will be collected in the ninth year, 10th year and just before the licence renewal.

However, as per the policy, Nepal Telecom and Ncell have to clear all their renewal fees within the eighth year of operation in annual instalment of Rs 2.5 billion.

However, ministry officials say the telecom sector’s development as well as revenue generation will face big problem if the CIAA fails to give a way out soon.

The new spectrum policy had fixed 0.4 percent of the total income of telecom operators as charge for the minimum spectrum and set a certain fee for additional and maximum spectrum used by them.

It has also fixed Rs 12 million per MHz for 3G spectrum, and the price is also the base rate for the planned 3G frequency auction.

Earlier in December, 2012, the CIAA had lifted the ban on frequency distribution and directed the NTA to allocate spectrum based on the new spectrum policy.

After the implementation of the new policy, the government has already collected Rs 2.70 billion in spectrum fees, including 3G spectrum charge from Nepal Telecom and Ncell.

The spectrum policy has mentioned starting the 4G service and fixing the spectrum price, paving the way for the entry of new operators. With the CIAA’s latest decision, introduction of 4G service will also be delayed.

According to NTA , its board is likely to hold a meeting on Friday to discuss the CIAA direction. “We will soon discuss the CIAA instruction and its implications on the telecom sector,” said NTA Director Ananda Raj Khanal.