UTL pays second installment of royalty
KATHMANDU:
United Telecom Ltd (UTL) has paid the second installment of its committed royalty to the government, three weeks after the deadline to pay the fee expired. The company, on Sunday, said that it is also preparing to acquire the unified licence soon.
UTL, an Indian joint venture and the first private sector telecom company, paid Rs 204.18 million, the annual installment of the committed royalty on Friday.
Last month, it had requested Nepal Telecommunications Authority (NTA) to provide two more months after it was unable to pay the installment of royalty dues.
“Last fiscal’s committed royalty installment has been cleared on Friday and we are also working on a plan to acquire the unified licence soon,” said SP Pachauri, CEO of UTL. Going by a provision set by the Cabinet, the company was supposed to have paid the annual installment of the royalty by the end of last fiscal.
Since UTL did not comply with the rule, the NTA Board had also been recommended to scrap UTL’s operating licence. Even though UTL requested for additional time to pay the royalty, NTA Board has so far not taken any decision regarding time extension and also on annulling the company’s permit.
“We have heard of UTL clearing last fiscal’s royalty. However, we are yet to receive a receipt of the fee deposited in the government bank account,” said a senior official at NTA. The committed
royalty, which UTL owed to the government, is a pre-set fee that was pledged while obtaining the operating licence in fiscal year 2002-03.
After payment of the second installment of the royalty, UTL has outstanding dues of Rs 1.22 billion of the committed royalty, which needs to be cleared within fiscal year 2019-20 in six annual installments. The company had delayed paying the annual fee citing decline in income from services, including International Long Distance (ILD) Gateway and data.
If the NTA Board does not take any decision to scrap UTL’s permit, the clearance of the committed royalty for last fiscal also paves the way for the company to acquire unified licence, according to the NTA official. UTL, in April last year, had made an upfront payment of Rs 102 million as licence fee to acquire unified permit. Unified licence allows companies acquiring it to operate multiple telecom
services including nationwide GSM mobile service.
UTL has been planning to obtain the unified licence and go nationwide with GSM mobile service. This will require an 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. Indian media reports said that Indian state-run Mahanagar Telephone Nigam Ltd (MTNL), the major investor at UTL, has been
conducting a study hiring SBI Capital Markets, a consultant, to evaluate the feasibility of investments in UTL.
MTNL has 26.68 per cent stake in UTL. Telecommunications Consultants India Ltd and Tata Communications hold 26.66 per cent share each and a Nepali firm — Nepal Ventures — has 20 per cent investment in UTL. Currently, there are three telecom companies — Nepal Telecom, Ncell and Smart Telecom — that are providing popular GSM mobile service and the total penetration rate has crossed 90 per cent in Nepal.
Source: THT
