Nepal’s Smart Telecom seeks extension to service expansion deadline

26 Jun 2015

Nepal’s Smart Telecom has submitted a request to the national industry regulator Nepal Telecommunications Authority (NTA), seeking an 18-month extension to the terms and conditions of its operating licence, regarding service expansion. The telco has yet to fulfil the conditions set down in its old licence, despite having been awarded a new ‘unified’ licence more than two years ago. The unified licence allows Smart Telecom to expand its original regional footprint to a full nationwide service – including new GSM services – but it has confirmed its networks have yet to reach 15 districts and 68 village development committees (VDCs), as per the terms of the old licence (which was issued in 2008 giving it rights as a rural telecommunication service provider). The Himalayan News Service notes that as per the terms of the old concession, Smart Telecom was meant to take at least two lines of phone services each in the government designated 398 VDCs of 40 districts in the central, western, mid-western and far-western regions of the country. A spokesperson for NTA, Achyuta Nanda Mishra, said: ‘The request of Smart Telecom is under consideration.’

In April this year, CommsUpdate reported that NTA had slammed the telco for failing to come up with a ‘convincing’ explanation regarding its delayed GSM service expansion under its unified licence. According to NTA, the telco has simply told it that it has built 400-plus mobile towers so far as part of the expansion, but provided no more information. The regulator is seemingly losing patience with Smart Telecom, which was granted the unified licence in April 2013. On 24 March 2015 NTA gave the operator 15 days to provide it with a progress report and rollout schedule – as per Smart’s original plan, it was supposed to have launched GSM mobile services in the Kathmandu area over 15 months ago. However, on receiving the telco’s report, NTA spokesperson Achyuta Nanda Mishra reportedly said: ‘There is no satisfactory report from the company on what it is doing,’ prompting speculation that the watchdog will take action to remedy the situation when it meets this week.

Part of the problem at Smart Telecom is a long-running saga over its ownership and the wrangling is stopping it putting in place the investment funding needed to deploy the GSM network countrywide. The company is currently 70%-owned by Lal Sahu Distribution of Singapore, with Nepali company Square Network owning 20% and Israeli-based Gilat Network owning 10%, though there has been talk of pulling in another strategic partner to help the operator find the funding for the nationwide service expansion and licence renewal fees required. Companies acquiring the unified licence have to pay NPR20.13 billion (USD204.5 million) over a ten-year period after getting the licence.

Nepal, Smart Telecom (Nepal)