NTA threatens to revoke UTL’s licence over non-payment

11 Jan 2011

Online news journal Myrepublica.com reports that Nepal’s telecoms regulator the Nepal Telecom Authority (NTA) has officially warned private sector operator United Telecom Limited (UTL) that it may scrap its licence for not paying its royalty fees – as per the terms and conditions of the commitment. Under its concession contract UTL is required to pay an annual royalty fee of around NPR20 per annum, rising to NPR370 per annum in 2012/2013. However, sources at the watchdog have told Myrepublica that it is currently paying just 4% of its revenue, an amount too small to pay off its royalty commitments. Further, the NTA official said that UTL has not paid royalties since 2006 noting that: ‘After deducting royalty received in the form of 4% of its revenue, the company still has to pay around NPR900 million to the government to clear its royalty liability.’ The regulator has now sent UTL a letter informing it of its intention to commence legal proceedings to cancel its operating licence and impose a fine of NPR500,000 ‘within a week’, as per clauses in the Telecom Regulation Act 1997. UTL General Manager Madan Singh has denied knowledge of the letter and countered that his firm’s difficulties stem from a government decision to suspend UTL’s licence for six months (during the king’s rule), a move he says adversely affected its goodwill and has left the company suffering ever since. ‘We have sued the government for defamation and have asked for compensation,’ he said, arguing that the royalties being claimed pale into insignificance compared with the compensation it was forced to pay at the time.

Nepal, United Telecom Limited (UTL)