NTA amends Otel licence conditions

KATHMANDU, DEC 25--The Nepal Telecommunications Authority (NTA) has eased the license condition for Otel Private Limited, a pre-paid calling card service provider although the company failed to start  service  as per the old licence condition.

As per the new license condition, it can now sign contract with multiple telecom companies to sell telecom service with pre-paid calling card. Earlier, it was allowed to start such business by signing contract with only one telecom company, according to NTA sources.

Normally, pre-paid calling card service providers buy talk time in bulk from telecom companies and sell them among customers allowing to make call at comparatively cheaper rate. When a customer make calls using the calling card, the card's value is deducted based on connection fee, duration of connection, surcharges and any maintenance charges associated with the phone card.

The NTA decision has however raised eyebrows of authority officials as the company got the condition amended despite its failure to work as per the old license provision. Otel having investment from Japan based Non-Resident Nepali had received the licence eight months ago to start pre-paid calling card, also know as pre-paid phone card service.   As per the law, NTA licencee has to start service within 90 days after receiving the permission which it failed to do.

Although the company had approached Nepal Telecom with a business proposal, the NT had rejected it stating that proposal not submitted as per its license condition. Given this context, the company which had earlier received licence by paying fee of Rs 3 million, approached the telecom regulator claiming that it didn't see business viability based on old license condition. Then, a board meeting of the authority held on Tuesday decided to amend the Otel’s licence condition giving it additional facilities.

“We have amended the licence of Otel as it sought permission to use gateway of multiple telecom companies to provide its pre-paid calling card service,” said Girindra Raj Adhikari, a board member of the NTA. He said that the company would be able to sell the service at comparatively cheaper rate.

However, other NTA officials unhappy with the decision, expressed suspicion over the decision claiming that it would be hard to bring down call rate which has already as low as Rs 1 per minute irrespective of call destination. “There is no strong mechanism to regulate such service providers at the moment,” said an NTA official. However, Adhikari said that telecom companies signing agreement with Otel will be responsible for keeping tab on Otel’s business and submit details to the NTA.