Poor Asset Management after Smart Telecom Takeover Delays Settlement of Liabilities

The government took control of the assets of Smart Telecom nearly two years ago after cancelling the company’s operating licence for failing to clear renewal fees and other long-overdue state dues, but the lack of proper asset management has left hundreds of creditors and tower owners unpaid.

The government revoked Smart Telecom’s licence in April 2023 and assumed control over its assets. However, unsold SIM cards and recharge cards remain stuck with wholesale distributors, while homeowners who leased space for telecom towers have not received rent for years. Stakeholders say the government’s failure to manage the seized assets has stalled the settlement of the company’s liabilities.

Devkanta Shilpakar, a wholesale distributor of Smart Telecom recharge cards based in Patan, said his investment of Rs 1.5 million in SIM and recharge cards has left him debt ridden. “The government should have sold the company’s assets and paid our dues, but nothing has happened,” he said.

Likewise, Krishna Bahadur Thapa, a homeowner who allowed the company to install a telecom tower on his property, said he has not received tower rent for the past five years. “Smart Telecom shut down almost three years ago, but the company had stopped paying rent two years even before that,” he said, adding that the tower and associated equipment have posed risks to his house.

Victims of Smart Telecom have formed a struggle committee under Thapa’s leadership to press for compensation. According to him, the company initially approached homeowners with documents, paid monthly rent through banks, and later began reducing payments as losses mounted before stopping completely.

Thapa said more than 1,000 people in Kathmandu alone have been affected, while the number of victims nationwide is estimated to be around 5,000. In many cases, homeowners have also been forced to pay electricity dues after the power used by the towers went unpaid.

A former official of Smart Telecom said unpaid electricity bills led the Nepal Electricity Authority to disconnect private household power supplies where towers were installed. The official also warned that disputes surrounding the company’s collapse have created serious security concerns for its shareholders and their families.

After the licence cancellation and asset seizure by the Nepal Telecommunications Authority, a shareholder of Smart Telecom filed an application at the Prime Minister’s Office on January 10, 2024, accusing the NTA of delays in completing legal procedures and the settlement of liabilities. The application demanded that the company’s assets and infrastructure be released solely for clearing outstanding dues. No action has been taken so far.

Under the Asset Management Regulation of Telecom Operators with Revoked Licences, 2022 (2079 BS), the government must form a valuation committee to determine the value of Smart Telecom’s assets and liabilities. Based on that valuation, assets are to be auctioned to recover dues payable to the government, the regulator and other entities. The regulation allows four to six months for the valuation process.

Although a valuation committee has been formed, it has not been fully constituted for a long time, halting the valuation process. A senior official at the NTA said the committee would get full shape soon. “We are moving forward to finalise the committee and begin work shortly,” the official said.

On Friday, victims met the Minister for Communications and Information Technology Jagdish Kharel and demanded swift compensation. According to Thapa, the minister assured them of justice. However, victims say they have received similar assurances in the past and remain skeptical about compensation.

Smart Telecom’s licence was automatically revoked on April 16, 2023 after the company failed to submit an application for renewal along with the required fees, in line with the Telecommunications Act.