NTA poised to shut down UTL for not paying royalty
KATHMANDU, JUN 12 -
The Nepal Telecommuni-cations Authority (NTA) is poised to shut down United Telecom Limited (UTL) for not paying the committed royalty. The regulator has already barred UTL from purchasing telecom equipment and paying the bandwidth cost.
UTL owes Rs 1.26 billion in royalties to the government as of the last fiscal year for basic telecom services. Despite NTA’s repeated calls, the operator has not paid the fee and instead has been seeking a waiver or re-negotiation citing losses and lack of a level playing field. NTA has described its argument as ‘baseless’.
“NTA is preparing to write to UTL soon with a direction to close down all its basic telecom services,” said an NTA source. “The plan is mainly targeted at stopping International Long Distance (ILD) gateway service considered to be the main source of income for the operator.”
Four months ago, NTA had decided to close down UTL’s basic services. At that time, the regulator had requested the Ministry of Information and Communications (MoIC) to recommend to the Home Ministry to help implement its decision and urged the Ministry of Finance to recover the royalty dues.
As the Communications Ministry has not responded to its plea, NTA is preparing to write to the operator to stop operations. According to the source, NTA chairman had met with Communications Minister Raj Kishor Yadav a few days ago to discuss the issue. At the meeting, Yadav had assured the chairman that he would talk to Prime Minister Baburam Bhattarai as the matter concerned a joint venture company with Indian government investment.
As the issue is connected with the Indian government’s investment, the Nepal government has been hesitating to take action on the matter for a long time. However, Bhesh Raj Kanel, chairman of NTA, said that they were determined to implement the decision of closing down the basic service of UTL. “We have already stopped facilitating UTL around three months ago for paying bandwidth cost and procuring equipment and telecom spare parts.”
As per the government set provision, if any licensee is required to import telecom equipment for service expansion, it is supposed to get a recommendation of NTA to get foreign exchange facility.
Likewise, NTA has to recommend to the Communications Ministry to obtain currency exchange service for the payment of bandwidth cost to international service providers. Regarding the matter, officials at UTL could not be contacted despite several attempts.
Although UTL has been hoping to get a waiver of the royalty dues through the highest political level, there has not been any such decision for a waiver yet. Recently, the Finance Ministry had asked the NTA to collect the outstanding dues from all telecom operators.
Under the operating licence for basic telecom, UTL has been offering fixed line national call, international call and lease line services. NTA said that UTL was least bothered about clearing its outstanding dues despite the regulatory body’s decision to shut down its services. The operator’s 10-year license for operation of basic telecom service expires on Oct 3, 2012 and it is required to formally apply for renewal by July 1.
Mahanagar Telephone Nigam Limited and Telecommunications Consultants India, which are owned by the Indian government, have a 26.68 percent and 26.66 percent stake in UTL respectively. Other investors include Tata Communications with a share of 26.66 percent and local partner Nepal Ventures with 20 percent.
Source: The Kathmandu Post
