Government Renews Ncell's License with Rs 20 Billion Installment Plan Amid Telecom Sector Challenges

The government has officially sanctioned the renewal of Ncell's telecommunications license, ensuring the private telecom giant continues its operations in Nepal. Ncell is set to pay Rs 20 billion in installments as part of the renewal fee to the Nepal Telecommunications Authority (NTA).

With Ncell's 20-year license on the brink of expiration, a crucial cabinet meeting held just days before the deadline decided to renew the license under specific conditions. A cabinet minister, speaking on condition of anonymity, revealed that the Rs 20 billion dues would be settled in four installments, accruing an additional 10% interest.

In a proactive move, Ncell had already paid Rs 4 billion of the renewal fee on May 27, three months before its license was due to expire, and formally requested an installment payment plan for the remaining amount. This renewal allows Ncell to continue providing mobile services for the next five years. The company has argued that it would be unjust for the government to nationalize Ncell after 25 years without permitting the sale of shares or structural changes within that period.

Concerns had been raised about unequal treatment between Ncell and state-owned Nepal Telecom, particularly regarding delays in Ncell's license renewal. The cabinet granted the installment payment facility under Section 20 of the Telecommunications Act, empowering the NTA to issue directives essential for the diversification, expansion, and regularization of telecommunications services.

On August 22, the NTA formally informed the Ministry of Communications about Ncell's request for an installment plan. Meanwhile, a government inquiry committee has submitted its report on Ncell's recent share transactions, though disputes over share ownership remain unresolved.

Under the Telecommunications Act, the government retains ownership of land, buildings, devices, and equipment belonging to telecom companies with over 50% foreign investment after a 25-year license period. If foreign investment is less than 50%, the government does not claim ownership of such assets. Additionally, the government has imposed restrictions on Ncell's ability to sell or transfer assets or shares before the license renewal, in accordance with the Telecommunication Service Provider's Property Management Regulations of 2079.

The regulations stipulate that any assets that will eventually revert to government ownership cannot be sold, mortgaged, or transferred without NTA approval within at least three years of the permit’s expiration.

With its license now extended until August 29, 2029, Ncell will be restricted from selling assets or shares after August 31, 2083, though current laws do not prohibit such transactions before that date.

Both Ncell and Nepal Telecom have faced declining revenues in recent years, largely due to the rise of OTT services. Despite increasing demand for data, the decline in international incoming calls has resulted in a 25% drop in revenue over the past five years. Currently, the average monthly data consumption of Nepali subscribers is 4.5 GB, compared to 20 GB in India. The telecommunications sector, which once contributed 5% to Nepal's GDP, now accounts for only 2%.

Despite these challenges, Ncell remains a key contributor to Nepal's economy, having paid over Rs 320 billion in taxes and non-tax revenue since its inception. In the fiscal year 2024/25 alone, the company contributed more than Rs 20 billion in various taxes and charges. Additionally, Ncell has invested over Rs 2 billion in corporate social responsibility initiatives across education, environmental conservation, and health sectors.