Government Eyes Ncell Assets as Licence Nears Expiry

Despite the government’s poor handling of the assets of Smart Telecom, it has begun formal preparations to bring the assets of Ncell under state control in line with the Telecommunications Act as the company’s 25-year operating licence approaches its expiry date.

The approved annual programme and budget of the Nepal Telecommunications Authority for the current fiscal year (FY 2025/26) states that the government will undertake necessary measures to manage Ncell’s ownership after the expiry of its licence in four years.

Ncell’s 25-year operating licence, issued on September 1, 2004 (Bhadra 16, 2061 BS), will expire in August 2029. A senior official at the Authority said the government plans to study the modalities for acquiring Ncell’s ownership and to formulate a commercial operating model for the technical, financial and managerial management of telecom services after the transfer.

“The government cannot take over assets all of a sudden,” the official said. “But it is within its right to make preparations in accordance with the law.”

Section 33 of the Telecommunications Act, 1997, states that land, buildings, equipment and other infrastructure related to telecommunications services in which foreign individuals or institutions hold more than 50 percent of total capital investment shall come under government ownership after the expiry of the operating licence.

Malaysia-based Axiata announced in December 2022 that it had sold its majority stake in Ncell to UK-registered Spectrlite UK. The company is owned by Nepal-born, Singapore-based businessman Satish Lal Acharya. In addition, 20 percent of Ncell’s shares are held by Sunivera Capital Venture, controlled by his wife Bhavana Singh Shrestha.

However, the Government of Nepal has not yet recognised the change in share ownership, keeping the ownership dispute unresolved.

Meanwhile, Section 33 (4) of the Act provides that telecom operators with up to 50 percent foreign investment may renew their operating licences even after expiry. This means that if Ncell is treated as a foreign-owned company within that threshold, it may be eligible for licence renewal. In that case, however, Ncell would be required to repurchase its assets from the government at a valuation determined by the state.