Nepal ignores concern on telecom JV

Even nine days after Nepal assuring visiting Indian External Affairs Minister S.M. Krishna that it would “amicably resolve” issues plaguing Indian telecom joint venture United Telecom Ltd (UTL), the government has made no move to fulfil its promise even as a deadline slapped on the JV ran out Thursday.
UTL officials said they had appealed to the concerned committee of Nepal Telecom Authority (NTA), the state-owned telecom regulator, after a 35-day pay-up time slapped by NTA ended Thursday and the Indian JV faced the threat of having its operating licence revoked.
UTL, a join venture between three Indian majors – Mahanagar Telephone Nigam, Telecommunications Consultants India and Tata Communications – and Nepali company Nepal Ventures, became the first private player in Nepal’s state-held telecom sector in 2003, running phone services on wave-based technology, which made UTL phones usable as mobile phones as well.
The JV suffered a crippling blow in 2005 when King Gyanendra took over power with the help of the army and cut down phone lines. Even after the state-run Nepal Telephones was allowed to resume land phone services, UTL’s services remained blocked unduly to provide advantage to a new private mobile phone company chaired by the king’s son-in-law.
With its business plan ruined and growth halted, UTL asked for its royalty dues to be waived and compensation. Though the royal regime waived royalty dues under New Delhi’s pressure, the JV’s ordeals continued even under the governments that succeeded the king.
Its inter-connectivity, ISP services and other activities have been constantly delayed and recently, even billboards announcing the appointment of Nepali filmstar Rekha Thapa as its brand ambassador were taken down by traffic police, who however have allowed the private mobile company’s gigantic billboards to remain.
Last month, NTA brought up the issue of royalty once again, telling UTL to pay up a sum of nearly NRS 900 million by April 28 or face the termination of its licence.
With Mahanagar Telephone Nigam and Telecommunications Consultants India being public sector undertakings, the issue was taken up strongly by Krishna when he visited Nepal April 20-22.
On the very day of his arrival, Krishna raised the issue of the JV’s plight with Nepal’s Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari, who assured him the matter would be resolved “at an early date in accordance with the earlier understandings between the two governments”.
However, neither the Nepal government nor the NTA has made any move since then, allowing the time allotted to the Indian company to run out.
Finally, fearing discriminatory measures against it, UTL wrote to the appellate committee of NTA Thursday, formally asking for a review.
Ironically, the ignoring of Krishna’s concern comes even as Nepal’s Foreign Secretary Madan Kumar Bhattarai is in New Delhi, holding consultations with Indian officials for Nepal Prime Minister Jhala Nath Khanal’s proposed visit to India.