NT said that its board had approved the terms of reference (TOR) and that it would issue a notice this week.
Plagued by rigid procurement rules and political interference, NT has for the last four years been planning to bring in a partner by divesting 30 percent of its shares. The company expects the tie-up to make it better able to compete with private start-ups in a cutthroat market.
Tanka Lal Shrestha, a NT board member, said that their meeting held on Friday had approved the TOR to hire a consultant. “We hope that our management will issue the EOI notice within a few days,” he added.
A committee formed by the NT board had studied the TOR prepared by a technical sub-committee under the Ministry of Finance. According to NT officials, some of the basic requirements for potential consultants are experience in strategic partnership studies, possession of qualified human resources and appointment of local agent. The involvement of an international consulting firm in the due diligence audit (DDA) and bidding is expected to attract a greater number of global bidders as the study would be more reliable.
In the first phase, NT will select an international consultant whose major responsibility will be to write the bidding documents to call a global tender for a competent partner and prepare NT’s DDA report. In the second phase, a tender notice will be issued and a strategic partner will be selected. Government studies have revealed that it will take NT two years to tie up with a partner.
“We will be introducing new services and restructuring the company to make ourselves an attractive partner to tie up with,” said Anoop Ranjan Bhattarai, managing director of NT. He added that they planned to extend 3G, fibre to the home and Wi-Fi services nationwide besides promoting machine to machine (M2M) communication services.
As per NT’s procurement procedure, potential consultants will have 45 days to apply after the notice inviting EOIs is published. Company officials said that they would be able to select a consultant after doing an evaluation within three months.
According to a study carried out by the Ministry of Finance in 2012, the prospective partner will have to invest Rs 30-40 billion to buy shares of NT. And it has also put forth a number of pre-conditions: Prospective partners should have operations in at least three countries, a subscriber base of 20 million and an annual income of US$ 1 billion for the last three years. Applying companies should also have been making profits for the last three years.
The government has a 92 percent stake in NT. After three years of repeated urgings, the government last year said it was okay in principle for NT to tie up with a competent international partner.
With the issuance of a unified licence to Smart Telecom and the government’s plan to issue similar permits to United Telecom Limited and STM Telecom Sanchar, NT expects to face tougher competition in the days ahead, said company officials.
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