Ncell to clear royalty dues Sunday

KATHMANDU, JUN 09 -

Private telecom operator Ncell is all set to clear its outstanding committed-royalty dues by Sunday, responding to the verdict of the Supreme Court (SC).

The company owes Rs 356.58 million in committed royalties to the government for the operation of mobile service as of the last fiscal year.

The first private sector mobile company had filed a case in SC, seeking a level playing field with other operators that pay only four percent of their total income as royalty. Few months ago, SC had issued the verdict, making it mandatory for Ncell to pay the committed royalty.

“We will pay the remaining royalty dues of Rs 356.58 million on Sunday,” said Sanju Koirala, corporate communications manager of Ncell. She added that the company had planned to clear the dues on Friday itself and even issued a cheque, but was not able to deposit it in Nepal Rastra Bank as the bank closes early on the day.

The Nepal Telecommunications Authority (NTA) had asked Ncell to clear the dues on Thursday after formally receiving the SC verdict. “The operator has to inform us with a copy of the deposit slip after paying the royalty,” said NTA spokesperson Kailash Nepaune.

Of the total committed royalties of Rs 1.44 billion for fiscal years from 2005-06 to 2010-11, Ncell has already paid Rs 1.08 billion based on the provision of 4 percent of the total annual income, according to NTA.

As per licence conditions, Ncell and United Telecom Limited (UTL) have to pay the royalty amount whichever is higher among the royalty they pledged while acquiring operating license or 4 percent of their total annual income.

Apart from Ncell, Nepal Telecom (NT) and UTL too owe Rs 20.52 billion (license renewal fee and frequency fee) and Rs 1.26 billion (committed royalty), respectively. The government has not been able to collect fees from these two operators in time due to NTA’s failure to take proper and timely decisions and the operators challenging NTA’s decisions in court.

NTA said despite its repeated call to clear frequency fees, NT has not shown interest to clear its liabilities, claiming that the amount was much higher than their estimation. The regulator is being pressured from the Ministry of Finance, the Office of the Auditor General and the National Vigilance Centre to collect the spectrum fee of Rs 710 million and license renewal fee of Rs 20 billion from NT.

Three years ago, NTA had ‘provisionally’ renewed NT’s mobile service operation license, charging only Rs 189 million in advance instead of the set Rs 20 billion. But after pressures to recover the dues, the regulator, about two months ago, wrote to NT to clear its dues.

However, state-owned telecom company has been saying that it would pay the renewal fee as per the old provision put in place three years ago—NT will pay its dues after Ncell clears its licence renewal fees.

Source: The Kathmandu Post