NTA lifts Ncell foreign exchange restrictions after two-and-a-half-year suspension

KATHMANDU: Ncell, a leading telecom operator in Nepal, is set to regain access to foreign exchange recommendations from the Nepal Telecommunications Authority (NTA) after a two-and-a-half-year suspension, following a decision by the NTA board to lift prolonged restrictions. The move addresses disruptions in Ncell’s service operations and quality caused by restricted access to foreign currency for equipment imports and payments, which had halted critical network expansion and vendor settlements.

A top NTA official confirmed the decision, stating, “Blocking foreign exchange recommendations and equipment import approvals has led to declining service quality and operational challenges for service providers. As a regulator and guardian of the sector, we’ve decided to facilitate this process. The issue of outstanding dues is largely resolved and will be settled gradually. We will send a letter to Ncell within a day or two.” The official added, “Now, the company needs to complete the NTA’s requirements and obligations to implement the decision.”

The suspension stemmed from a dispute over the 2100 MHz frequency fee, which led the NTA to halt Ncell’s foreign exchange recommendations for payments related to telecom equipment, bandwidth, and consultancy services. This restriction stalled work on over 700 towers and delayed payments to vendors. Although Ncell cleared NPR 361.5 million in dues for the 2100 MHz band in Poush last year, the matter remains under review in the Supreme Court, with a final resolution pending. Despite this, the NTA has opted to reinstate the foreign exchange facility to support Ncell’s operations.

The restrictions had blocked over NPR 1.5 billion in foreign exchange recommendations, including NPR 1.05 billion needed for equipment to enhance service quality and network expansion. For nearly 15 months, Ncell has been unable to import telecom equipment, severely impacting its operations. The lack of payment approvals also led Tata Communications Singapore, a key bandwidth supplier, to cut services to Ncell in Asar last year, with the company now preparing for legal action against Ncell. Employees at Ncell expressed optimism that immediate approval of foreign exchange recommendations could resolve this issue and prevent further escalation.

Additionally, Ncell has been unable to settle approximately NPR 550 million in payments for bandwidth, annual consultancy fees to foreign firms, and membership fees to international organizations. The company has also faced denials for network and microwave frequency allocations and has been unable to open Letters of Credit (LCs) due to the foreign exchange curbs. These constraints have hindered Ncell’s ability to maintain and expand its network, affecting service reliability and customer satisfaction.

Under current regulations, telecom service providers cannot import equipment—radio or non-radio—without NTA approval, as outlined in the telecom equipment import and foreign exchange recommendation procedures. The NTA’s decision follows a legal precedent set by the Patan High Court in Mangsir last year, which ruled in favor of Nepal Telecom, issuing a mandamus order against additional fees and penalties for frequency dues prior to Jestha 16, 2078. Nepal Telecom paid NPR 350 million based on this ruling, and Ncell followed by clearing its NPR 361.5 million in dues, paving the way for the NTA’s recent decision.

The reinstatement of foreign exchange recommendations is expected to alleviate significant operational bottlenecks for Ncell. It will enable the company to resume importing critical telecom equipment, expand its network, and meet financial obligations to vendors and international partners. This development is seen as a vital step toward improving service quality and restoring Ncell’s operational capacity, which has been strained by the prolonged restrictions. As Ncell prepares to comply with the NTA’s requirements, the telecom sector anticipates a boost in service reliability, potentially averting further disruptions.