UTL asks NTA for additional time

KATHMANDU:

United Telecom Limited (UTL) has requested Nepal Telecommunications Authority (NTA) to provide two months of additional time to clear its annual instalment of committed royalty. The call has put the telecom authority in quandary, requiring decision either to scrap the operating licence or to grant additional time as sought.

Going by the government provision, the company was supposed to pay Rs 204.18 million, the annual instalment in royalty, by the end of last fiscal year or last Thursday (July 16). Instead, UTL, an Indian joint venture company and also the first private sector telecom company, appealed for two more months stating that it was unable to clear the fee owing to decline in income from services, including International Long Distance (ILD) Gateway and data.

“Since it is a crucial issue related to the operating licence, our board will soon decide on what to do,” said Ananda Raj Khanal, officiating chief of NTA. Responding to the demand, the authority for now has only reiterated that UTL is required to pay the instalment annually before the end of each fiscal.

In October 2012, the Cabinet had decided to collect committed royalty dues of UTL and GSM mobile licence renewal fee of Nepal Telecom (NT) and Ncell in eight instalments. Following the Cabinet decision, NTA had renewed the basic telecom service licence of UTL on receiving first instalment of Rs 204.18 million for fiscal year 2012-13. At that time, the authority had placed a condition to UTL to pay its annual royalty instalment before each fiscal end or face the consequences. Other companies — NT and Ncell — are paying instalment of their permit renewal fee annually.

The committed royalty, which UTL owes to the government, is a pre-set fee that was pledged while obtaining operating licence in fiscal year 2002-03. NTA records show that UTL has outstanding dues of Rs 1.42 billion in the committed royalty, which is supposed to be cleared within fiscal year 2019-20.

A source at UTL said that the company failed to earn enough revenue to pay the royalty due to lack of support from the regulatory body in ILD interconnection issue and providing spectrum required for data service expansion. “Annual royalty is not a big issue, but the matter was overshadowed due to ongoing internal discussion on how to move ahead in market,” said the source.

The company has been planning to obtain unified licence and go nationwide with GSM mobile service. This will require investment of Rs 357.5 million as licence fee and commitment to pay renewal fee of Rs 20.13 billion within 10 years after receiving the permit.

After the government decided to issue the unified licence to UTL and Smart Telecom April last year, UTL had also paid Rs 102 million upfront in licence fee for the permit. The source said that since unified permit also means huge investment, the UTL’s board is taking the issue seriously.

Source: THT