KATHMANDU, May 5: Investors eyeing to jump into telecom service will now not be able to get license for operating ´limited mobility´ service and those already operating limited mobility service too will not be able to expand their services henceforth.
The new situation emerged after Financial and Infrastructure Committee (FIC) of the Cabinet recently scrapped the provision of licensing limited mobility.
Officials said such a decision was taken as a part of government´s plan to implement proposal of ´unified licensing´, which allows telcos to offer a full range of telecoms services through a single license.
The decision to restrict the expansion of limited mobility service would hit companies like United Telecom Limited (UTL) and rural telcos, such as Nepal Satellite, STM Sanchar and Smart Cell that are operating under the license of limited mobility.
Although by virtue of their license, those operators were supposed to provide the service within a district only, but they had rapidly expanded their services and operating similar to the GSM operators who paying more fee compared to them for the license as well as renewal. They had managed to win such expansion mainly as Nepal Telecommunications Authority (NTA), instead of adhering to the spirit of the license, allowed them to expand the ´limited mobility´ service haphazardly.
For instance, lawmakers at Public Accounts Committee that probed into the irregularities of licensing and distribution of spectrum have assessed that the very decision of NTA to allow UTL to operate limited mobility nationwide was against the nature of the license. They have even tagged NTA´s decision as a ´policy level corruption´.
Likewise, NTA had also later allowed rural telcos, which originally operated with licenses for basic services (fixed line) in certain VDCs, to operate limited mobility services.
"Such haphazard issue of license smells rat, for by allowing them to operate limited mobility nationwide, NTA had allowed them function like a GSM service provider without paying higher royalty, as Nepal Telecom or Ncell pays," said Dr Prakash Chandra Lohani, coordinator of PAC´s subcommittee.
As a result, these companies were operating nationwide service by paying just Rs 2.5 million to Rs 100 million in license fee and 90 percent of that amount as renewal fee, whereas Nepal Telecom and Ncell are required to pay Rs 210 million each for the license and Rs 20 billion as renewal fee every 10 years.
"Considering these anomalies, we decided to scrap licensing of limited mobility and decided to go for unified licensing regime. This will help maintain equal standard for the operators," said Secretary at Prime Minister´s Office Leela Mani Paudel, who is also the member of the FIC of the Cabinet.
He said regulator will not provide license of limited mobility to any operator now and the four operators operating this service can´t expand their service in additional area.
After the new decision, operators willing to add new service or to expand their service will have to pay bulk amount of Rs 357.5 million for unified license and renewal fee of Rs 20 billion every 10 years. However, such operators opting for unified license will be able to reimburse the amount paid earlier while issuing license of International Long Distance (ILD) gateway and basic service.
"It was being difficult to administrate and license was being issued from backdoor and there was no proper standard," Paudel said adding there is no question on issuing two different licenses in the name of limited mobility to the operator which is actually working as GSM operator.
Under unified license, he said the operators will be allowed to offer all telcoms services, including local telephone service, domestic long distance and international long distance calls.