The government has refused to provide an installment facility to internet service providers (ISPs) for paying their outstanding royalties and rural telecommunications development fees, despite repeated requests.
The Nepal Telecommunications Authority (NTA) has been urging ISPs to settle their dues, while the service providers claim they are unable to pay the substantial amounts in a single installment. However, the government has rejected their appeal for payment in installments.
Notably, two major ISPs, Worldlink Communications and Subisu, have already cleared their dues. This has intensified pressure on other service providers to follow suit.
Worldlink paid Rs 2.15 billion in arrears on November 15, while Subisu cleared Rs 313.831 million last week, comprising Rs 174.851 million in royalties and Rs 138.979 million in rural telecommunications development fees. Following Subisu's payment, the NTA renewed its license for five years on January 9.
Request for Installments Rejected
In early January, the Internet Service Providers Association of Nepal (ISPAN) submitted a letter to the NTA requesting a five-year installment plan for outstanding payments. However, the government has dismissed this request, citing the significant arrears already paid by some ISPs.
A senior official from the Ministry of Communications and Information Technology confirmed that the demand for an installment facility is no longer under consideration. "They [the ISPs] have already paid significant arrears following the court order. What purpose would installments serve now?" the official remarked.
NTA Director Santosh Poudel warned that licenses of defaulters would be revoked if they continue to delay payments. According to him, the NTA has not discussed any plans to introduce an installment facility.
As of now, ISPs owe approximately Rs 1.37 billion to the authority. The NTA had initially set a deadline of mid-January for all ISPs to clear their dues. While Worldlink and Subisu complied, other providers have yet to pay. The NTA is expected to decide soon on the course of action against defaulters.
Under Nepal’s law, telecommunications service providers licensed by the NTA must pay royalties at 4% of their total income and a rural telecommunications development fee at 2%. However, ISPs have long resisted these payments, arguing that fees collected under the "maintenance" heading does not fall under their income.
In May 2024, the Supreme Court ruled in favor of the government, mandating that royalties and rural telecommunications development fees be collected even from revenue designated for maintenance. Following the verdict, ISPs were compelled to comply.
Non-compliance with payment obligations has led to further consequences. The government withheld foreign exchange facilities for ISPs to pay international companies for bandwidth. This prompted Indian bandwidth provider Airtel to suspend services in May 2024, causing internet speeds in Nepal to slow significantly.
