The Ministry of Information and Communications (MoIC) has sought more details from Nepal Telecommunications Authority (NTA) on the planned “unified licencing policy” that the latter has floated.
The ministry says the pre-condition set for rural telecom operators to bring them under the new policy was not clear.
Two weeks ago, the telecom regulator NTA had asked its line ministry, the MoIC, to adopt a unified licencing regime—that will allow operators to provide all types of telecom services—to create a competition in the local telecom market, give equal footing to rural telecom service operators, remove licencing provision for limited mobility service and simplify the licencing system. It has proposed Rs 295 million for obtaining the licence.
Secretary at the MoIC Shreedhar Gautam said the recommendation forwarded by the NTA was not clear, mainly on the pre-conditions set for the operators that are currently offering services in rural areas.
“It has said that rural telecom operators would have to establish ‘exchange or BTS’ in all districts. However, it has failed to mention the number of such exchanges or the BTS to be set up to assure expansion of the telecom service,” Gautam said. Apart from this, the MoIC has also sought additional suggestions from the NTA on why the unified licencing system should be introduced. It has also asked NTA to provide a draft of the notice to be published in the Nepal Gazette for the new provision. The new licencing plan is basically aimed at providing facilities to rural telecom operators—Smart Telecom and STM Telecom.
As per the criteria in the new licence regime, rural telecom operators will have to expand their network in all districts where they are permitted to offer services within the next three years. Smart and STM have received permission to take telecom services in 62 and 52 districts respectively.
“They will have to set up an exchange or BTS in all districts covering at least four Village Development Committees as identified by the District Development Committees for local development,” said Bhesh Raj Kanel, the NTA chairman. He said that after acquiring a unified licence, small operators will also be able to bring in new services like the 3G and 4G.
Under the planned licencing provision, any operator obtaining licence with Rs 295 million and agreeing to pay Rs 20.07 billion as licence renewal fee after 10 years will be able to operate all services.
Nepal Satellite had acquired a basic licence at Rs 2.5 million for five years, which is expiring next year. Similarly, Smart Telecom and STM Telecom had got licences for Rs 100,000 each for five years and 10 years respectively.
However, the NTA’s move has been criticiced by its own officials, telecom experts and MoIC officials. They say the provision was based on the interest of small operators eyeing full mobility GSM mobile service.
UCPN (Maoist) leaders and former communications ministers Krishna Bahadur Mahara and Agni Sapkota had also keenly taken the issue of unified licencing during their tenure. Kanel said Mahara and Sapkota had directed him to better manage licencing provisions and introduce uniformity in licencing to give all operators a level playing field.
Two operators—Nepal Telecom and Ncell—have to pay Rs 20 billion each as licence renewal fees to the government after three years of GSM mobile service. They each had paid Rs 210 million for GSM service. “The unified licencing provision can give operators like Ncell a cause to evade renewal licence fee and take its subscriber base to a new company like Smart Telecom by shutting down the company,” the official said.
The NTA had recommended that the MoIC adopt the unified licencing regime based on clause 23 (2) of the Telecommunication Act 1997.
However, the NTA official said the authority’s top brass had started the process of introducing the new provision in haste and without following the due process of holding consultations with the office itself and with telecom operators.
“NTA might also withdraw the planned licencing provision as the spectrum issue is under consideration of the Public Accounts Committee. Moreover there are so many criticisms on it,” the official added.
Showing losses, Smart and STM have long been wanting to operate full mobility mobile service. They have also been lobbying with the government to allow them a level playing field. However, Nepal Satellite that had acquired the basic telecom service licence as well as the International Long Distance gateway licence is not so keen on the unified licencing as it can expand limited mobility across the country.
Currently, only Ncell and Nepal Telecom are permitted to offer GSM mobile service.
Kanel said that some operators that were already giving full mobility service in the name of limited mobility and those who feared competition from the new system were against the new provision. “This is the best solution to better manage the licencing system and remove limited mobility,” he said.
The recommendation forwarded by NTA is based on the study for development of rural telecom services and expansion. The study was conducted by an NTA consultant Gyanendra Man Baidhya, a telecom expert. Four years ago, NTA had proposed a similar plan.
However, it was rejected by the MoIC, saying that the government’s policy was
to make mobile service a technology based on which only licenced operators are allowed to provide full mobility GSM-based mobile services.
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