CG purchases 80% stake in Nepal’s STM Telecom

12 Mar 2013

The Himalayan News Service reports that Nepal’s Chaudhary Group (CG) is planning to enter the domestic telecoms market in the next six months through its subsidiary CG Telecom, following the unit’s acquisition of an 80% stake in rural telecom service provider STM Telecom‚ owned by US-based STM Communications Service Inc. STM, which operates under the brand name Gramintel, has been providing telecoms services to around 5,500 subscribers across 628 village development committees (VDCs) in 52 districts. CG says that going forward its new CG Telecom subsidiary will focus on villages‚ continuing the legacy of Gramintel, but that it will also look to explore opportunities in urban areas. CG managing director Nirvana Chaudhary, added: ‘CG Telecom will continue using the Gramintel brand and [will] also introduce CGTel for its services in various areas’.

Chaudhary went on to say that CG Telecom plans to invest around NPR2 billion (USD23.3 million) to expand its services, including the launch of GSM mobile services, and will buy out the shares of AR Investment in STM Telecom to become its 100% shareholder in time for its relaunch under the new brand.

As previously reported by TeleGeography’s CommsUpdate, last month STM Telecom submitted an application to the Nepal Telecommunications Authority (NTA) for a unified operating licence – making it the third firm to apply behind United Telecom Limited (UTL) and Smart Telecom. UTL filed its application in October last year, while Smart followed suit a month later. The unified licence regime, introduced in May 2012, allows telecoms operators to operate a range of services, including fixed line, GSM (mobile) and international long-distance calls through a single concession upon payment of an NPR357.5 million (USD4.21 million) fee. In addition, they are required to pay an NPR20.13 billion renewal fee after ten years, and then every five years after that. If successful in its bid, STM Telecom will receive 3MHz of frequency from the NTA with which to operate GSM services.

Nepal, CG Telecom (incl. STM Telecom Sanchar)