In Nepal, UTL’s license has been automatically canceled, but there is no regulator decision
In Nepal, the telecommunications license of United Telecom Limited (UTL) has been automatically canceled under the law after the operator failed to pay the renewal fee and accumulated arrears by September 4. At the same time, the Nepal Telecommunications Authority has not yet made a formal decision or published a notice on the cancellation of the license, Kathmandu Post reports.
Under Nepalese law, if a telecommunications license is not renewed within the prescribed period, it is canceled automatically. The regulator must then immediately publish a corresponding notice. The authority’s board of directors was to consider the matter from September 5, but as of Wednesday, the procedure was still ongoing, according to regulator spokesperson Min Prasad Aryal.
Debt to the state
The total amount of UTL’s unpaid payments and the license renewal fee is approximately 31 billion rupees. The license renewal fee itself amounts to 20 billion rupees, while more than 3 billion rupees consist of a 15-percent late fee and penalties.
More than 7.5 billion rupees additionally account for unpaid royalties, contributions to the Rural Telecommunications Development Fund, and spectrum fees. Regulatory representatives said the license cannot be renewed until the operator fully settles its obligations with the state.
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Company proposals
UTL submitted an application to renew its license on June 3—three months before the deadline, as required by the rules—but did not make the necessary payments. The company asked to be allowed to first pay 13.53 billion rupees, provided its proposals were approved, and to repay the remainder in installments.
The company appealed to the regulator, the Ministry of Communications and Information Technology, the Department of Industry, and Nepal Rastra Bank. UTL asked for the consequences of the Covid-19 pandemic to be recognized as force majeure, for assistance in transitioning from 2G and 3G technologies to 5G, for spectrum fees to be waived for the period of non-use, and for foreign investment to be approved.
UTL said that, with the authorities’ assistance, it was ready to attract $500 million in foreign investment and provide a bank guarantee or financial instrument worth 10 billion rupees. The company’s management also reported arrangements for a $55 million loan to repay the debts. At the same time, regulatory representatives noted that the government cabinet had not yet made a decision on the company’s proposals.
