Nepal threatens to pull UTL's license

Dylan Bushell-Embling
12 Jan 2011

The Nepalese government has warned it plans to revoke mobile operator United Telecom Limited's (UTL) license for alleged failure to pay royalties.

Telecom regulator NTA told My Republica the operator owed around 900 million Nepalese rupees ($12.6 million) in unpaid license fees, in contravention of the terms of its license.

UTL is a consortium between Nepal Venture and Indian companies Tata Comm, Telecommunications Consultants India and MTNL – the largest shareholder by a slim margin. The company operates in 36 of the nation's 75 districts, providing voice, SMS and internet services.

The group has been accused of paying just 4% of its revenue as royalties, handing over to the government just over 100 million rupees, not the more than one billion allegedly owed.

NTA said it is initiating the legal procedures required to strip UTL of its license and hit the company with a fine of 500,000 rupees.

But in response to the government's claims, UTL said the alleged unpaid license fees were small fry compared to the losses inflicted on it during King Gyanendra's brief reign between 2001 and 2008.

UTL had its services suspended multiple times, ostensibly for national security concerns, during the years Gyanendra imposed direct monarchy rule on Nepal.

UTL has sought compensation from the government over the impact of these suspensions on its reputation and financial wellbeing, which general manager Madan Singh told the paper was still being felt.

Singh said the alleged unpaid royalties were nothing compared to the amount of compensation he felt his company was due. The company has previously estimated the losses at over 4 billion rupees.

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