KATHMANDU: United Telecom Limited (UTL), a telecommunications company that has remained commercially inactive for nearly a decade, has sought renewal of its basic telecommunications service license, raising questions over its outstanding liabilities, regulatory compliance and continued access to valuable spectrum.
UTL submitted its license renewal application to the Nepal Telecommunications Authority (NTA) on June 1. The application has drawn scrutiny as the company is estimated to owe the government between Rs 29 billion and Rs 30 billion in outstanding dues and other liabilities.
Sources at the telecommunications regulator said some officials have been reluctant to process or endorse the UTL renewal file, amid concerns that those approving the decision could face legal consequences.
The issue has also drawn political attention following Communications and Information Technology Minister Bikram Timilsina’s reported involvement in efforts related to UTL’s license renewal. Questions have been raised over whether the license renewal process can move forward without first settling the company’s outstanding financial obligations.
A source at the NTA said employees were confused about how to proceed with the file, fearing that the official who signs the decision could ultimately face legal consequences.
A former chairman of the NTA said UTL’s license should not be renewed without first assessing its outstanding dues and reviewing its history as a license holder.
“Renewing the license without settling the arrears and examining the company’s past record as a license holder is an illegal step,” the former chairman said.
UTL’s basic telecommunications service license is due to expire on September 4 (19 Bhadra). The company applied for renewal on June 1 (19 Jestha), while discussions were reportedly underway within the NTA over whether to cancel the license before its expiry.
According to NTA records, UTL has yet to settle its accumulated dues or deposit the prescribed renewal fee. Existing regulatory provisions require applicants to fulfill their previous financial obligations before obtaining license renewal.
UTL has, however, proposed paying around Rs 13 billion upfront and settling the remaining amount in 10 installments. The company has made the initial payment conditional on receiving approval for foreign investment.
Critics have questioned the arrangement, arguing that the condition could enable UTL to secure renewal and proceed with investment plans without first guaranteeing immediate settlement of its outstanding liabilities.
Despite remaining commercially inactive for years, UTL continues to hold spectrum in the 850 MHz, 900 MHz and 1800 MHz bands. In its renewal proposal, the company has outlined plans to launch 5G services if it resumes operations.
The case has raised broader questions over the management of scarce spectrum resources and whether a company that has failed to provide effective telecommunications services for nearly a decade should continue holding valuable frequencies.
UTL was granted a unified license for basic telephone and GSM mobile services on September 5, 2016, with a requirement to begin operations within one year.
The company failed to meet the rollout deadline, and subsequent efforts to establish network infrastructure and provide services remained largely unsuccessful.
Former NTA officials have argued that any decision to renew UTL’s license should take into account its regulatory history as well as the recovery of government dues.
Raj Bahadur Singh, son-in-law of former King Gyanendra Shah, has emerged as a key figure in UTL’s proposed restructuring and license renewal efforts.
UTL’s shareholders include Indian state-owned entities MTNL and TCIL, Tata Communications and Nepal Ventures. Singh reportedly holds around a 20 percent stake through Nepal Ventures.
With the Indian investors having become largely inactive in recent years, Singh’s role in the company’s restructuring efforts and attempts to attract foreign investment has reportedly increased.
Industry stakeholders have called for a comprehensive “Fit and Proper” assessment of UTL’s proposed investors and management before the company is allowed to resume operations.
They have argued that such an assessment should cover not only financial capacity but also technical expertise, managerial experience, financial transparency, beneficial ownership, potential conflicts of interest and past regulatory compliance.
The UTL controversy also extends to concerns over unused spectrum and its past involvement in telecommunications infrastructure projects.
UTL has been linked to the controversy surrounding the Mid-Hill Highway optical fibre project, in which Teleinfra Nepal JV received a mobilization advance of Rs 402 million from the NTA in 2018.
Following delays in project implementation and subsequent Supreme Court rulings, the NTA encashed bank guarantees worth Rs 502.5 million.
The NTA’s former leadership under then-Chairman Digambar Jha also faced criticism over the awarding of strategic infrastructure projects to an underperforming company. UTL was fined Rs 500,000 in 2017 over failures related to network rollout.
The final decision on UTL’s license now rests with the NTA and the Ministry of Communication and Information Technology. The decision will determine whether UTL can return to Nepal’s telecommunications market after nearly a decade of inactivity or face license cancellation and measures to recover outstanding government dues.
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