Supreme Court scraps cases against unified licence, paves way for new GSM mobile operators

The Supreme Court today opened the door for big investment in the telecom sector – that has seen geometric growth in recent years – as a division bench
of acting chief justice Damodar Prasad Sharma and justice Tarka Raj Bhatta scraped seven writ petitions against the unified telecom licence.

The decision will pave the way for the government to move on with new telecom licensing regime, according to the telecom regulator.

Nepal Telecommunications Authority’s (NTA) introduced the unified telecom licence regime to allow small telecom companies to operate GSM cellular mobile service across the country.

The Supreme Court decision will not only give legal teeth to Nepal Telecommunications Authority to issue unified licence but also spectrum policy and an ad-hoc committee that was formed to make policy decisions. The NTA will now also be able to auction the 3G and 4G spectrum.

Currently, Nepal Telecom (NT) and Ncell are proving the GSM mobile service. But the decision will bring in three new operators to the GSM mobile service that is expected to increase competition and lower the tariff benefiting the consumers.

Three telecom operators – Smart Telecom, United Telecom Ltd (UTL) and STM Telecom that has been branded as CG Telecom after Chaudhary Group bought its 80 per cent stake – had applied for the unified licence in April.

Immediately after the application, NTA awarded Smart Telecom the licence, whereas UTL could not be able to get the licence due to the writ petition.

CG Telecom – a telecom venture of Chaudhary Group – had also filed a writ petition challenging the NTA decision that according to the telecom service provider was biased. The NTA rejected CG Telecom the unified licence saying that the operator had failed to meet the criterion to get unified licence.

CG Telecom had but challenged the NTA decision also for violating Nepal Gazette, according to which only those companies that have expanded their services to government-designated areas and cleared outstanding dues could be eligible for the unified licence. “The NTA on April 11 has awarded unified licence to Smart Telecom that had not completed the service expansion criteria, according to the Nepal Gazette,” CG Telecom had claimed in the writ petition.

Other writ petitioners also claimed that the increase in number of GSM mobile service providers will also increase unhealthy competition in the market that is small and is already saturated.