Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal Telecom (NT) has witnessed a dramatic 57.21 percent fall in its net profit this fiscal year after being hit by a one-time GSM license renewal fee of Rs 20 billion and a sharp rise in employee pension allocations. According to the company’s annual report for fiscal year 2081/82 BS, NT’s total operating revenue stood at Rs 34.53 billion, reflecting only a marginal 0.08 percent decline compared to the previous year. However, net profit plunged by over Rs 3.56 billion, marking one of the steepest profit contractions in recent periods.
The company reported that the renewal payment for GSM permission significantly reduced its investment interest earnings, while the pension liability provision more than doubled — from Rs 4.97 billion in the previous fiscal year to Rs 13.15 billion — due to board decisions under Nepal’s new accounting compliance. This combined financial burden led to a decline in interest income by Rs 3.07 billion.
Nepal Telecom also attributed the profit decline to a decrease in international incoming call volumes as Over-The-Top (OTT) services like Viber and WhatsApp continue to erode traditional voice revenue. Interconnection income was reported to have fallen by Rs 419 million, nearly 14 percent compared to the previous fiscal year. Additionally, competitive internet service providers (ISPs) offering Wi-Fi and FTTH services have reduced mobile data usage, putting more pressure on NT’s core service earnings.
The state-owned enterprise further stated that serving remote and difficult terrain areas under national connectivity obligations has resulted in higher costs and low returns. Policy changes affecting telecom tariffs have also resulted in a decline in service revenue. Under NFRS 19-based accounting rules, immediate recognition of pension and gratuity expenses hit this year’s financials heavily.
Company officials said that unless structural reforms and new revenue avenues are introduced, profitability will remain under pressure despite Nepal Telecom retaining the largest customer base in the country.
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