Ncell submits detailed letter to PM Karki highlighting Policy and Regulatory concerns in Nepal’s telecom sector

KATHMANDU – Nepal’s telecommunications sector is facing mounting challenges as Ncell Axiata Limited, one of the country’s leading mobile service providers, has formally submitted a detailed letter to the Prime Minister, outlining concerns over policy uncertainty, regulatory inequality, and the security of foreign investment. The letter, which spans 16 points, emphasizes that discriminatory treatment among telecommunications service providers threatens both consumer rights and the long-term sustainability of the sector.

The company’s correspondence comes amid a backdrop of growing debate over Nepal’s investment climate and regulatory environment for critical infrastructure services. According to Ncell, certain government decisions and regulatory amendments have created conditions that are “unlawful, unequal, and unjust,” directly affecting license renewal, interest charges, and foreign shareholding rules.

Longstanding Contribution to Nepal’s Economy

Ncell’s letter highlights its 21-year presence in Nepal, serving more than 14 million subscribers nationwide. The company claims to have contributed over NPR 360 billion in revenue to the state and generated thousands of jobs directly and indirectly. Beyond its commercial operations, Ncell reports investing approximately NPR 2 billion in corporate social responsibility initiatives, including healthcare services in remote areas, educational support programs, environmental conservation, disaster early-warning systems, and sponsorship of national sports events.

Describing itself as a model of successful foreign investment, Ncell underscores its role in technology transfer, knowledge transfer, and fostering competition in Nepal’s telecommunications market. The company warns that weakening its operational model could dissuade international investors from investing in Nepal, potentially affecting future foreign investment inflows.

Telecommunications as a Foundation for Fundamental Rights

The letter stresses that mobile and internet services are critical for implementing the constitutionally guaranteed right to information and communication in Nepal. Disruptions in telecommunications services, Ncell argues, could directly impede citizens’ fundamental rights and compromise access to banking, digital payments, government services, and emergency communications.

Highlighting its commitment as a responsible corporate citizen, Ncell emphasizes its cooperation in achieving the “Digital Nepal” vision, continuous service expansion, and long-term investment in advanced technologies. The company calls for government facilitation to enable rural network expansion and the introduction of innovative technologies.

Sector Challenges and Policy Concerns

Ncell draws attention to the declining contribution of the telecommunications sector to Nepal’s GDP, which has fallen from 4 percent to 1.5 percent. Factors cited include excessive taxation, the growth of over-the-top (OTT) services, high frequency fees, and policy uncertainty—all of which have limited long-term investment capacity.

The company also raises concerns over recent Cabinet decisions dated 2080/11/06 and 2081/05/13 (Bikram Sambat), under which the Nepal Telecommunications Authority (NTA) renewed Ncell’s mobile service license for five years while imposing stringent financial and structural conditions. Ncell describes these conditions as contrary to an investment-friendly environment and has called for a review to ensure service continuity and protect foreign investment.

Shareholding Disputes and Regulatory Conflicts

One of the letter’s central arguments revolves around foreign shareholding transactions. Ncell, a publicly listed company on the Malaysian Stock Exchange, states that certain foreign legal obligations require disclosure after agreements are concluded, conflicting with Nepal Telecommunications Authority rules that mandate prior approval for changes exceeding 5 percent of paid-up capital shares.

The company argues that, in line with the Foreign Investment and Technology Transfer Act, 2019, it submitted necessary notifications to the Department of Industry within 30 days, making prior approval practically impossible. Rejecting such transactions, Ncell contends, violates the intent of the law and discourages foreign investors from participating in Nepal’s telecommunications sector.

Double Standards and Financial Disparities

The letter claims that the government has applied double standards by charging Ncell a 10 percent interest rate on license renewal installments, while exempting Nepal Telecom from similar obligations. According to Ncell, this has imposed additional financial burdens amounting to billions of rupees.

The company also asserts that restrictions on changes in share ownership directly interfere with the constitutional right to property, raising serious concerns about the security of foreign investment in Nepal. Additionally, Ncell emphasizes that recent regulatory amendments affecting past investments are inconsistent with the Telecommunications Act, creating an unstable policy environment.

Commitment to Service Continuity and Future Investment

Despite these challenges, Ncell reiterates its commitment to uninterrupted service delivery, investment in new technologies, and increasing Nepali ownership through an initial public offering (IPO). The company stresses that a conducive regulatory and policy environment is essential to ensure long-term employment, innovation, and continuity of telecommunications services.

“The issues highlighted are not limited to a single company,” the letter states, “but are linked to the broader debate on fair regulation, investment security, and consumer rights in Nepal.” Ncell urges the government to apply uniform standards for license renewal, remove unlawful conditions, and approve share transactions through proper regulatory channels, thereby fostering a fair and stable environment for all investors.

Implications for Nepal’s Investment Climate

Industry analysts note that the concerns raised by Ncell carry broader implications for Nepal’s foreign investment profile. Telecommunications, as a critical infrastructure sector, plays a pivotal role in digital governance, e-commerce, education, and emergency response. Any disruption could affect not only individual subscribers but also the country’s economic growth and international reputation as a secure investment destination.

By formally presenting its grievances and legal arguments, Ncell seeks to draw attention to the need for equal treatment of all service providers, highlighting the potential risks of policy inconsistency and regulatory bias. The company’s appeal underscores the importance of harmonized rules that protect investor rights while ensuring the public receives reliable telecommunications services.

With Nepal striving to attract foreign investment in infrastructure and technology, the resolution of the issues raised by Ncell could serve as a litmus test for the government’s commitment to creating a fair, transparent, and investor-friendly environment.