August 22: The profit of state-owned Nepal Telecom in fiscal year 2018/19 slumped to its lowest in the last nine years. The company had earned a profit of Rs 17.48 billion in FY 2017/18, which plunged to Rs 10.2 billion in FY 2018/19.
Nepal Telecom’s chief competitor Ncell has been expanding its network as well as increasing its profit while the state-owned company is lagging behind in both fronts.
Nepal Telecom has defended itself saying that its profit shrunk in the last fiscal year as it had to spend billions of rupees for renewal of its license. The increase in the rate of corporate tax also caused a decline in its profit, according to Nepal Telecom officials.
Telecommunication companies have to pay Rs 20 billion as fee for renewal of their license once in every five years. In the last fiscal year, Nepal Telecom paid Rs 4 billion as an installment of the renewal fee to the government and Rs 1 billion as corporate tax.
Besides that, the use of Facebook, Whatsapp, Viber among others for making international calls has also contributed to the decline in Nepal Telecom’s profit, says the company’s Managing Director Dilli Ram Adhikari.
However, former General Manager of Nepal Telecom Buddhi Prasad Acharya doesn’t agree with such excuses. According to him, the company has been bearing losses due to its failure in expanding its services and lack of income-generating packages.