Government plan to bring policy hits roadblock

KATHMANDU, MAR 21 -

The government’s plan to bring a policy to manage and regulate cross-holding in telecom companies has hit a roadblock.

With Madhav Poudel, coordinator of the committee formed by the Nepal Telecommunications Authority (NTA) to study the matter, appointed as the Minister for Information and Communications, the committee has now become incomplete.

After TeliaSonera, the parent company of Ncell, acquired a majority stake in Nepal Satellite Telecom (NST) last year, the NTA formed the three-member committee to recommend whether the government should allow cross-holding and why. The panel had also been asked to advise the telecom authority how it should regulate cross-holding among its licensees, if allowed.

Cross-holding is a situation when a company/person has investment in more than one licencee company in the same service area.

When the committee was formed in April last year, it was initially given a month’s time to prepare a study report on cross-holding and its regulation. However, the study delayed due to the absence of a chairman at NTA, and the latest development will delay it further, NTA officials said.

The officials said they would consult with Minister Poudel to take new steps regarding the planed regulation. It is the Communications Ministry that gives the final decision in crucial policy issues like cross-holding based on the NTA recommendation.

According to Poudel, the committee had completed drafting the regulation and only some inputs from the NTA to be incorporated were left. “Now, after my appointment as the minister, the study should be complete, appointing a new member in my place,” he said.

In a bid to give shape to the proposed rule, the committee had also received inputs from the Insurance Board, Nepal Rastra Bank (NRB) and Former Finance Secretary Rameshwor Khanal, as an expert.

NTA Spokesperson, Kalilash Neupane said the NTA board would decide the new steps to be taken. He said they had no rules to restrict practices like cross-holding and mergers. “If there is an anti-competitive activity that leaves a negative impact on the market, the government can take action as per existing laws,” said Neupane, also the committee member.

The cross-holding issue in the telecom sector arose after the Swedish-Finnish telecom provider acquired a majority stake in NST through its subsidiary TeliaSonera Asia Holding BV last year. It had bought a 49 percent stake in Cypriot holding company Airbell Services which owns 75 percent shares in NST.

Reports said although TeliaSonera acquired NST shares indirectly, all conditions for final settlement were yet to be fulfilled depending on the regulation to be implemented in Nepal.

Source: The Kathmandu Post