KATHMANDU, OCT 17 -The government plans to resume examining a policy to manage and regulate cross-holding in the telecom sector. The Nepal Telecommunications Authority ( NTA ) has formed a new committee to carry out a study and submit a report.
The new committee under the coordination of Bhaskar Mani Gyawali, executive director of the Nepal Rastra Bank, has been asked to complete the study within 30 days. The members in the panel are chartered accountant Shiva Prasad Pandey and NTA ’s deputy director Kailash Neupane.
An NTA board meeting held last week had decided to form a committee and complete the stalled study to formulate a policy on cross-holding issues, according to the NTA . The previous committee had abandoned the study halfway after its coordinator Madhav Paudel was named Minister for Information and Communications.
Cross-holding is a situation when a company or person has investments in more than one licensee company in the same service area. “We will start the study on cross-holding in the telecom market immediately after the Dashain festival,” said Neupane who is also the NTA spokesperson. He added that they would review the previous study and give a final report to the NTA board.
The cross-holding issue had arisen after TeliaSonera, parent company of Ncell, acquired a majority stake in Nepal Satellite Telecom (NST) through its subsidiary TeliaSonera Asia Holding BV last year. However, the Swedish-Finnish telecom company last month sold its shares in NST by selling back its indirect ownership to Zhodar Investment based in the British Virgin Islands citing “regulatory reasons” in Nepal.
The previous study was started in April last year after TeliaSonera’s cross-holding issue emerged. However, it was delayed due to the absence of a chairman at the NTA and its coordinator Paudel not being able to perform his duties.
The new committee will study international practices and existing laws and recommend whether the government should allow cross-holding and why, according to NTA officials. It has also been asked to advise the NTA on how it should regulate cross-holding among its licensees, if it is allowed.
Presently, there are no rules preventing practices like cross-holding and mergers in the telecom sector. Once the board approves the report, the NTA will send it to the Communications Ministry to create a policy on cross-holding. The government will need to amend the Telecommunications Act and the Company Act to implement the policy, according to an NTA official.
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