NT falling prey to politicking
KATHMANDU, OCT 19 -
It’s everybody’s knowledge that Nepal Telecom (NT) is the best performing public enterprise, but what many do not know is that it has witnessed a maximum of political interference when it comes to the appointment of its chief.
This fact is evident from the appointment of Amar Nath Singh as NT’s new managing director. This is the third time in three years that Singh has been appointed to the post. Over the period, either Singh or Bishwa Nath Goel has led NT.
The ‘musical chair’ at NT started in 2009. Since then, every successive Information and Communication Minister has tried to elevate their own man to the top NT post.
Singh’s latest appointment was recommended by Information and Communication Minister JP Gupta at a Cabinet meeting on October 13. Earlier in March this year, Goel was appointed MD by Krishna Bahadur Mahara, the then Information and Communication Minister, removing Singh appointed by Shankar Pokhrel.
NT sources say frequent changes of managing directors and ministers’ interest in the issue has a lot to do with NT’s resources. In the last few years, the company has been carrying out massive infrastructure expansion, especially in the GSM mobile segment. And, everyone knows that the contracts for these expansions are of billions of rupees.
During Goel’s seven-month tenure, NT awarded contracts for much talked-about Next Generation Network project, 2 million IP CDMA project and was in the process of evaluating bidders for WiMax technology-based voice/data service and 10 million GSM mobile lines. Two Chinese companies—ZTE Corporation and Huawei Technologies—and Sweden-based Ericssion are fighting for the 10 million GSM mobile lines contract. The global tender for the 10 million GSM lines project was floated by Goel. Singh had planned to add 6 million GSM lines during his previous tenure.
According to an NT official, the company has to please political party leaders, ministers concerned as well as neighbouring countries for commissioning any big project. “The government must appoint NT’s managing director through a free competition and allow him/her to work freely,” the official said.
“The government must stop changing managing directors frequently as it affects the company’s routine expansion plan, which is ultimately the loss to the country, company and consumer,” said Saroj Kumar Dhungana, president of Nepal Telecom Employees’ Union. “The MD must be allowed to work at least for two years without interference.”
With Ncell toppling NT from the No 1 position in the GSM mobile segment, the state-owned telecom operator has a lot to do to regain the status. Although the newly appointed managing director has said that his first priority would be to regain the No 1 position, no one knows how long he will last.
Singh is retiring after three years and his competitors—Goel and Kanhaiya Lal Gupta—are retiring after five months. Other potential officials for the managing director’s posts are Anoop Ranjan Bhattarai, Madhu Sudan Karmacharya, and Jiban Ratna Shakya. Earlier, former Managing Director Sugat Ratna Kansakar had led the company for five consecutive years. But in recent years, senior officials are seen lobbying with political parties demanding the post as soon as their candidate leads the Information and Communications Ministry. As soon as a change of government takes place, top NT officials intensify visits to political leadership. “Our top leadership is more interested in power games rather than concentrating on making the organisation a leading player in the telecom sector,” said a trade union leader at NT.
NT is still the largest revenue earner for the government, but its profit growth is shrinking. NT lags behind Ncell in terms of growth in subscriber base and its profit growth has taken a beating over the last two years.
A workers’ union leader at NT said if the situation continues, the company will no longer be the largest tax payer. “We have been demanding the government to allow us to bring a strategic partner, but the issue has remained undecided at the Ministry of Finance for the last eight months,” the official added.
Last year, Ncell toppled NT to become the GSM segment leader. It was the combination of several factors, including aggressive marketing and rebranding exercise, launch of new services and infrastructure expansion that pushed Ncell to the numero uno position. Experts say it’s high time that the government bring a strategic partner at NT.
The Ncell-NT competition is a classic example of how state-owned enterprises and private sector entities work. While NT was marred by weak management, government indecisiveness and interference, Ncell invested heavily in infrastructure. “Failure to make available and distribute SIM cards and delay in infrastructure expansion is hitting our health,” said an NT official.
Year Net Profit (billion) Profit Growth (%)
2006/07 Rs 5.65 14.60
2007/08 Rs 7.94 40.53
2008/09 Rs 10.17 28.08
2009/10 Rs 10.77 5.89
20010/11 Rs 12 (Projected) 11.42
Year Subscriber base (million) Subscriber Growth (%)
2006/07 1.58 39.82
2007/08 2.72 72.15
2008/09 4.93 81.25
2009/10 5.46 10.75
20010/11 6.78 24.17
Source: Kantipur
