UTL ordered to pay Rs. 7.5 billion or face license revocation

KATHMANDU: The Nepal Telecommunication Authority (NTA) has issued a stern directive to UTL Telecom Limited, mandating the payment of an outstanding amount totaling Rs. 7.5 billion within 15 days. The notice, released on Friday, serves as a final warning to UTL, indicating that failure to comply will result in the initiation of the license revocation process.

UTL was granted a basic telephone service license on August 20, 2073 (Nepali calendar), permitting it to provide telecommunications services across Nepal. However, UTL has since defaulted on several financial obligations, including the license renewal fee, frequency charges, royalty payments, and contributions to the Rural Telecommunication Development Fund. These dues, critical for the operation and regulatory compliance of telecommunication services, have remained unpaid despite multiple reminders from the NTA.

The regulator’s frustrations are compounded by UTL’s prolonged inactivity and its attempts to legally contest previous efforts to revoke its license for non-payment of dues. This legal stalling tactic has only exacerbated the situation, delaying the resolution of significant financial arrears owed to the government and the regulatory authority.

Moreover, UTL’s performance on critical infrastructure projects has also been problematic. In 2074, UTL secured a contract to construct an optical fiber backbone along the Mid-Hill Highway in Gandaki and Lumbini provinces. However, the project was effectively stalled due to UTL’s inactivity and subsequent legal battles against the Ministry of Communication and Information Technology and the NTA. This delay hampered the progress of a vital project intended to enhance connectivity in these regions.

In January, the Supreme Court dismissed UTL’s petition, which had challenged the NTA’s previous attempts to revoke its license due to non-payment of dues. This judicial decision has cleared the path for the NTA to take more definitive action against UTL. With the legal obstacles removed, the NTA has reiterated its demand for the immediate settlement of arrears, setting the 15-day deadline as a final opportunity for compliance.

The notice from the NTA underscores the authority’s readiness to enforce Section 28 of the Telecommunications Act, 2053, which provides the legal framework for revoking a telecom operator’s license in case of non-compliance with regulatory and financial obligations. This measure, if implemented, would formally end UTL’s authorization to operate as a telecommunications service provider in Nepal.