Nepal Satellite Telecom’s licence revoked

The license of Nepal Satellite Telecom (NST) has been automatically terminated as it failed to clear outstanding dues by the deadline that was yesterday, according to the Nepal Telecommunications Authority (NTA).
The private telecom company operating under the Hello Nepal brand owes some Rs 799.2 million as of July 16 as royalty, licence renewal fee, frequency fee, service expansion fee and Rural Telecommunication Development Fund (RTDF). But the Nepal Satellite Telecom has failed to clear its dues, despite repeated calls from the telecom regulator.
“The license has been automatically terminated as the company failed to pay its dues within the deadline of August 18,” the NTA informed, adding that the telecom company can, however, appeal within 35 days in regard to the automatic termination of the license, and the court’s verdict will be final in relation to its licence, if it moves to court.
“After a negotiation, the NTA had earlier directed Nepal Satellite Telecom to deposit the first tranche – Rs 70 million – of its dues by August 18 and clear the remainder of the outstanding dues within three months,” the NTA said, adding that the Nepal Satellite Telecom’s licence has been revoked automatically as the telecom service provider failed to deposit the first tranche of its tax dues by yesterday (August 18). “Had the telecom service provider paid the first installment, the company would have gotten an additional three months to clear the rest of its dues.”
Earlier, the telecom regulator asked Nepal Satellite Telecom to deposit its dues by the end of the last fiscal year. Instead of paying, the telecom company moved to the court to cancel the amount payable to NTA and an interim order was duly issued. But the Supreme Court refused to continue the interim order.
After the Supreme Court’s order, the NTA had – on July 22 – also sought a clarification from Nepal Satellite Telecom asking why its licence should not be revoked, to which the telecom company responded with a bargain that it would clear the dues, if it was allowed to expand its services in Kathmandu.
The NTA board meeting on August 3, however, directed the company to pay Rs 70 million – the first installment – within 15 days and pay the remaining amount within three months. But Nepal Satellite Telecom failed to deposit the Rs 70 million by August 18.
Nepal Satellite Telecom – owned by businessman Ajeya Raj Sumargi – has also been dragged into tax issues, earlier in May too. The Inland Revenue Department (IRD) had directed Nepal Satellite Telecom to pay Rs 4.31 billion capital gains tax (CGT) out of the gains the company made, while transferring 75 per cent of its share to TeliaSonera eight years ago.
Though NTA claimed that it was not in favour of scrapping licences of telecom service providers, they were obliged to scrap the licence as many telecom companies regularly failed to pay their dues by holding on to licences, not expanding telecom services as promised by them, and also not clearing applicable tax dues to the government on time.
But In February, the Public Accounts Committee (PAC) had directed the telecom regulator to recoup the amount and revoke the licences of all operators that failed to pay their dues within a month. Likewise, Finance Committee under the parliament had also instructed the Finance Ministry and Ministry of Communication and Information Technology to do the needful to recover dues from different telecom companies. The committee had even instructed the NTA to scrap their licenses, if they fail to clear their dues in time.
According to the authority, nine telecom service providers including Nepal Satellite Telecom, United Telecom, Smart Telecom, and BroadLink Network have yet to clear Rs 4.31 billion accrued as frequency charges, royalties, and RTDF.
In 2007, Nepal Telecom Authority had issued telecom service licence to Nepal Satellite Telecom that has been providing telecom services to a limited number of customers primarily based in the far-west region, though it had acquired licence to provide telecom services across rural areas. “The company did not expand its telecom services as was promised,” the regulator added.

Ncell contributes Rs 129 billion to government coffer

Ncell Pvt Ltd (Ncell) today announced that it has contributed approximately Rs 129 billion to the national treasury, in the form of fees, royalty and taxes to date. As a long-term and committed investor in the country, Ncell aims to maintain its lead as the largest tax payer of the country in coming years as well, it said.
"As of May 4, Ncell has contributed Rs 128.63 billion to the government in the form of tax, royalty and fees," managing director of Ncell Simon Perkins said.
"I am encouraged that Ncell has made significant contributions to the state treasury, which serves as important source of public funding in areas where it matters the most – such as building roads, schools and medical infrastructures that are core to the well being and welfare of the people of Nepal,” he said.
Ncell is the highest taxpayer in Nepal and has contributed steadily to government coffers for the fiscal years 2012-13 (2069-70) and 2013-14 (2070-71).
"In the fiscal year 2014-15 (2071-72) alone, Ncell paid more than Rs 28.6 billion to the government as tax, royalty and fees,” Perkins said, adding that the company wishes to continue with this trend and maintain its lead as the largest taxpayer for the longer-term.”
In order to maintain the lead and take the company to the next level, Ncell on May 9, has announced its largest ever capital expenditure (capex) spend of $120 million (approximately Rs 12 billion) for the remainder of 2016, aiming to expand 3G aggressively in rural and remote areas and also to enhance quality in areas where it is already present.
Ncell presently has network coverage that reaches out to 92 per cent of population, and serves more than 13 million customers. In recent years, Ncell has been rapidly expanding 3G, and has requested Nepal Telecommunications for approval for the company to provide 4G services.
Divulging more on revenue contribution, Perkins disclosed that Ncell as of May 4, has paid Rs 30.69 billion in advance tax, Rs 39.66 billion in Value Added Tax (VAT), more than Rs 7 billion in license fees, as well as approximately Rs 8.95 billion in royalty, among others. The company has also contributed Rs 4.20 billion to the Rural Telecommunications Development Fund (RTDF).
The telecommunication company’s contribution to the state coffers has been growing significantly year-on-year, which reflects Ncell’s ambitious investment plans and growth. Ncell has also been solidly contributing towards socioeconomic development in various areas of Nepali society, the telecommunication company added.
In keeping with its unblemished profile as a responsible corporate citizen committed to the welfare of the people and nation of Nepal, Ncell also aims at working closely with the regulator and the government to fulfil national goals to benefit Nepalis populace through the use of technology that can bring immediate and impactful results in education, health and mobile financial services, among others.