NTA flouts rule book to issue permits to UTL, Smart Telecom

KATHMANDU, MAY 18--It has been revealed that the Nepal Telecommunications Authority (NTA) decided to issue the unified licence two telecom companies—Smart Telecom and United Telecom Limited (UTL) breaching the government set rules. Only the companies completing service expansion in the government designated areas and paying outstanding dues are eligible for obtaining the unified licence, according to the criteria set in the Nepal Gazette.

However, NTA board (currently also known as stop gap committee to make decision in the absence of NTA Chairman) on April 11 decided to issue licence to Smart Telecom which has not yet finished service expansion in areas fixed by the government in its old licecnce provided five years ago. Likewise, even though UTL is yet to clear the dues to the government, the company was decided to issue the unified licence on the basis of Baburam Bhattarai led government’s decision to collect over Rs 1 billion dues royalty from UTL in eight installments in eight years.

The unified licence provision was introduced by the government a year ago giving name of “basic telecom service” with a target to allow small telecom companies provide nationwide multiple telecom services including GSM mobile under a single licence and make local telecom market more competitive. Currently only Ncell and Nepal Telecom have been providing GSM mobile service.


The decisions of the NTA made available to the Post shows that first meeting of NTA Chairman Digambar Jha decided to monitor base transceiver stations (BTS) of Smart Telecom based on limited mobility service provided in 25 districts to issue the unified licence. But, the authority was supposed to check BTS in 398 village development committees spread in 40 districts, where Smart Telecom was assigned to take at least two lines of its service.

 The government set criteria in the Gazette has clearly stated, “If any area is designated for making any service available, such conditions have to be fulfilled.” As per the NTA, Smart Telecom had a total of 171 base transceiver stations (BTS) in 25 districts. Out of them, 11 were under constructions and many BTS were not in operation for lack of electricity.

A source at the NTA said that even if the officials who monitored the BTS showed faults in their reports, the final report presented to the board was revised “intentionally”. “Smart Telecom is not eligible to get the unified licence based on the original reports,” the source added. The NTA report on BTS monitoring in four districts—Kavrepalanchowk, Sindhupalchowk, Sindhuli and Makawanpur showed that out of 32 BTS or towers installed only 16 were in operation.

Now, Smart Telecom which received the licence on April 15 is doing internal preparation to roll out service with new strategy. Based on the monitoring of BTS in 25 districts, NTA board had provided the licence to Smart Telecom. UTL so far has not received the licence with the NTA decision to issue the unified licence receiving stay order from the Supreme Court. STM Telecom Sanchar, yet another small telecom company had also applied for the unified licence.

The source said that STM Telecom was not found eligible as the company had no sufficient BTS in government assigned areas to make available the service. The NTA while deciding to issue licence to Smart Telecom had said that it would ultimately give the licecnce to STM Telecom as well once the company complete tower installation. “Even though the government’s main target is to give licence to all four small companies—Smart Telecom, UTL, STM Telecom and Nepal Satellite, one of them meet the criteria fixed in the Gazette,” the source added.

STM Telecom is against the decision on issuance of licence to only two companies saying that the NTA had failed to treat operator equally. The issue became more controversial as soon as the NTA decided to issue the licence to UTL and Smart Telecom. Over half a dozen cases are filled in the court against unifed licence and other issues like appointment of Jha as NTA chairman, current stop-gap board of NTA, new spectrum policy and NTA decisions which are related with the unified licencing provision.

Immediately after the appointment of Jha as chairman, he had intensified preparation to issue the unified telecom licence with target to Smart Telecom. After Jha received stay order from the court based on petition that argues Jha does not meet NTA chairman qualification, the government has push the work of unified further through the stop gap board formed activating the Clause 60 of Telecommunication Act 1997.

While deciding to issue the unified licence, the stop gap board had also decided to ask bringing all its 171 towers into operation within three month setting new criteria. It showed that the NTA board changed the criteria endorsed by the cabinet for companies eyeing the unified licence. As per the company website too, its service coverage had reached only to 365 VDCs of the country.

After the NTA issued the licence to Smart Telecom, the disparity of the Ministry of Information and Communications has also increased. The source at the NTA said that the Communications Minister Madhav Prasad Paudel, who used to work as advisor to the NTA in past had also suggested not to issue the unified licence in haste. “Paudel was against issuing the licence early fearing of controversy,” the source said. Two cases filed against the new licence system were already under consideration of the Supreme Court.

Normally, all decisions of the board are included in NTA’s Management Information System report being release each through website. However, the NTA did not disclose the decision regarding required monitoring of Smart Telecom’s tower site.

Interestingly, even as Smart Telecom was allowed to provide the limited mobility service, its Smart Cell service is found working like GSM mobile. A monitoring team of NTA has found that Smart Telecom’s limited mobility’s SIM issued in Kavre was able to make and receive call from districts like Kavrepalanchowk, Makawanpur, Sindhuli, Mahottari Sarlahi, Rautahat, Bara, Chitwan and Dhading. “Limited mobility means the SIM has to work only within the district where it is issued,” the source at the NTA said. He added that the NTA had not provided roaming facility for limited mobility service of Smart Telecom.