Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government has decided to implement a new arrangement for the renewal of Ncell’s mobile license, allowing the company to pay the Rs 20 billion renewal fee in four installments with interest. This decision was made during the Cabinet meeting held on Thursday.
Government spokesperson and Minister for Communication, Information, and Technology, Prithvi Subba Gurung, announced that no interest will be charged on the first installment, while a 10 percent interest rate will be applied to the second, third, and fourth installments.
Ncell’s GSM mobile license is set to complete 20 years on 15th Bhadra 2081 (August 31, 2024). The company is required to renew its license for an additional five years before this date. Previously, Ncell had requested the government to allow the remaining Rs 16 billion of the Rs 20 billion renewal fee to be paid in installments after paying Rs 4 billion on 14th Jestha 2081 (May 27, 2024). The government has now agreed to this request, permitting payment in four installments.
However, while the government’s decision provides Ncell with additional time to arrange the required funds, the company has expressed dissatisfaction with the interest charges on the installments. A source close to the Ncell stated, “This is outright unfair. The government has never treated Ncell equally, and it is clear that they haven’t done so this time either. When Nepal Telecom renewed its license for the third time after 20 years in Baisakh 2076 (April 2019), only Rs 20 billion was charged with no penalties or interest. Similarly, no interest or penalties were imposed during the first and second renewal installments.”
Nepal Telecom, which is partially government-owned, was able to renew its license last year without any interest or penalties, despite completing 20 years in Baisakh 2076 (April 2019). Although there have been demands for equal treatment of both telecom companies, the government has decided to impose interest only on Ncell’s renewal payments.
This decision is expected to impose a significant financial burden on Ncell. At a time when mobile service providers are already facing declining revenues due to the increasing use of OTT apps like Viber, Messenger, and WhatsApp, the additional burden of interest payments could further strain Ncell’s operations.
Ncell may have to pay a total of Rs 5.60 billion, including Rs 1.60 billion in interest, for the first installment. Following this, Rs 5.20 billion, including interest, will be due by Bhadra 2083 (August 2026), Rs 4.80 billion by Bhadra 2084 (August 2027), and Rs 4.40 billion by Bhadra 2085 (August 2028).
Over the next four years, Ncell is expected to bear an additional Rs 4 billion in interest payments alone, significantly increasing the financial pressure on the company. This situation highlights the ongoing challenges in the telecommunications sector, where companies like Ncell face both regulatory and market-driven obstacles.
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