What’s in Ncell’s letter submitted to PM

KATHMANDU: Ncell Axiata Limited has formally submitted a detailed letter to the Prime Minister highlighting grievances, legal arguments, and reform demands, citing policy uncertainty, regulatory disparities, and investment risks that have plagued Nepal’s telecommunications sector in recent years.

In an official statement released today, Ncell shared the key points of the letter. It noted that inconsistent treatment among similar service providers—particularly regarding license renewal, interest charges, share ownership, and regulatory conditions—jeopardizes telecom service continuity, foreign investment security, and consumer rights.

The company emphasized its 21-year contribution to Nepal, history of tax compliance, employment generation, role in the Digital Nepal initiative, and the social and economic impact if services are disrupted.

Ncell claims certain government decisions and regulatory amendments are contrary to the law, discriminatory, and unjust.

Specifically, the letter highlights that while competitor Nepal Telecom faces no interest on license renewal, Ncell was compelled to pay in installments with a 10% interest rate.

Restrictions on shareholding changes, it argues, infringe on investors’ property rights. Disruptions in telecom services, which affect education, healthcare, commerce, and government operations, risk impacting over one crore users, billions in revenue, and thousands of jobs.

Ncell underscores that the issues raised go beyond one company, touching on fair regulation, investment protection, and consumer rights.

The company frames telecom services not merely as a business but as a fundamental tool for citizens’ constitutional right to information and communication. Any disruption, it warns, could violate citizens’ rights.

The statement reads: “Regulation must be impartial, stable, and uniform. The letter urges the government to correct unequal treatment, remove illegal conditions, recognize share transactions through regulatory procedures, and apply consistent standards in license renewal. Ncell’s 16-point submission calls for policy review, fair treatment, and sustainable solutions.”

Summary of Ncell’s 16-Point Letter:

1. Contribution to National Development
   Ncell has provided telecom services to over 14 million people for 21 years, contributing more than Rs 360 billion in revenue and directly or indirectly generating thousands of jobs. The company has spent over Rs 2 billion on corporate social responsibility, supporting health, education, environmental protection, disaster warning systems, and national sports.

2. Successful Foreign Investment Example
   Ncell presents itself as a model of successful foreign investment in Nepal, contributing to technology transfer, knowledge sharing, and improved service quality. Weakening this example could deter future foreign investors.

3. Fundamental Right to Information and Communication
   Mobile and internet services form the foundation for constitutional information and communication rights. Service disruptions affect banking, digital payments, government services, and emergency alerts, impacting citizens’ fundamental rights.

4. Responsible Corporate Citizenship
   Ncell positions itself as a responsible corporate citizen committed to the Digital Nepal initiative, continuous investment, and service expansion, emphasizing that government facilitation would accelerate rural network development.

5. Declining Telecom Sector
   The telecom sector’s GDP contribution has fallen from 4% to 1.5%. High taxes, rising OTT services, costly frequency fees, and policy uncertainty have reduced revenues and weakened long-term investment capacity.

6. Cabinet Decisions Reconsideration
   Ncell urges review of Cabinet decisions (2080/11/06 and 2081/05/13) that imposed strict financial and structural conditions on its license renewal, labeling them unlawful, unjust, and unfriendly to investment.

7. Pre-Approval Dispute
   Regulations require pre-approval from Nepal Telecommunications Authority (NTA) for share transactions exceeding 5% of paid-up capital. However, as a Malaysian-listed public company, disclosure obligations conflict with local pre-approval rules. Ncell requests recognition of share transactions through appropriate regulatory processes.

8. Status Quo Proven
   Ncell argues that its two decades of continuous service demonstrate technical, financial, and managerial capability. Experienced international management has improved service quality.

9. License Renewal as Evidence
   License renewal already signifies government recognition of the company’s capacity, making subsequent questions a double standard.

10. Tax Obligations
    Ncell has paid over Rs 169 crore in taxes post-share transactions and is ready to pay additional taxes if legally required. Allegations of tax evasion have harmed the company’s reputation.

11. Property Rights
    Restrictions on shareholding changes violate constitutional property rights and undermine investment security.

12. Contradiction to Foreign Investment Policy
    Decisions conflict with government policy on equal treatment for foreign investment and international agreements, raising concerns about Nepal’s commitments abroad.

13. Regulatory Amendments
    Amendments to telecom regulations contravene the law’s intent and negatively affect past investments, signaling instability.

14. Unequal Treatment
    Nepal Telecom was exempt from interest charges during license renewal, while Ncell was charged 10%, imposing significant additional financial burdens.

15. Key Requests
    Ncell calls for review of shareholding conditions, interest charges, and regulatory amendments, seeking only equal treatment, not special privileges.

16. Future Commitment
    Ncell pledges uninterrupted service, investment in new technologies, increasing Nepalese ownership through IPOs, and supporting the Digital Nepal initiative. A favorable regulatory environment will ensure long-term investment, employment, and service continuity.