Outstanding committed royalty: NTA directs NT to clear dues
KATHMANDU, JUN 18 -
The government has started to tighten screw on telecommunication companies to collect outstanding dues from them.
The Nepal Telecommunications Authority (NTA) on Sunday directed Nepal Telecom (NT) to clear the committed royalty amounting to Rs 3.27 billion.
The amount has remained outstanding against the state-owned telecom utility for GSM mobile service operation in the first ten years (fiscal years 1998-99 to 2007-08).
The regulator had not been able to collect the royalty in time as the case regarding pledged royalty being challenged by Ncell at the Supreme Court, paying only four percent on annual income each year. “We have written to the NT to pay the remaining royalty,” said Kailash Prasad Neupane, spokesperson of the NTA. He said that out of total committed Rs 3.90 billion, NT had paid Rs 635 million which was 4 percent of its total annual incomes for the ten-year period.
As per the provision, the state-owned telecom utility is required to pay the same amount of royalty, licence and its renewal fees as committed by fellow operator Ncell that had lost the case a few months ago. Last week, Ncell had paid Rs 356.58 million to clear dues until last fiscal year.
Dipesh Acharya, deputy director at the NTA’s licence section, said that the NT had obtained the GSM mobile operating licence in 1999, agreeing to pay royalty amount to be committed by future mobile service operators.
“Since Ncell (then Spice Nepal) that came through bidding had committed Rs 3.90 billion royalty for the first 10 years, NT has to pay the same royalty amount,” he added.
However, NT has said the provision was ‘not justifiable and practical’, saying that it started offering the service when the technology was expensive and income was low. "The committed royalty should be implemented from the same year when Ncell started service," said Surendra Prasad Thike, spokesperson for NT.
Lately, the Ministry of Finance has also been pilling pressure on the telecom regulator to collect the dues with the government failing to meet the revenue target this fiscal. Recently, the NT board decided to pay Rs 350 million for frequency fee out of Rs 710 million claimed by the regulator.
As per the government set provision, the NT, Ncell and United Telecom Limited (UTL) are required to pay royalty either 4 percent of their total income or pledged royalty, depending on whichever of the two comes higher. NT officials were not immediately available for comment on the issue of royalty.
The provision of committed royalty is applicable for first ten years and thereafter the telecom operators have to pay 4 percent of their annual income to the government, according to the NTA.
The NTA data shows that the NT had grossed Rs 15.87 billion in the first 10 years. Currently, the NT is into its 14th year of mobile service operation and Ncell into eighth. Similarly, the UTL which owes Rs 1.26 billion in unpaid royalty to government is into its ninth year.
Neupane said that the NTA would also ask the UTL soon to clear the royalty dues. “Since the UTL will have to apply for licence renewal within two weeks, we will remind it to pay the outstanding amount,” he added.
The royalty case of the UTL is under consideration with the government as it has been asking for a waiver, citing losses due to stiff competition and bias of the regulatory body.
Source: The Kathmandu Post
