Government Initiates Plan to Bring Ncell Under State Ownership and Operate It Commercially

KATHMANDU, Nov 6 

The Nepal Telecommunications Authority (NTA) has begun groundwork to bring Ncell under government ownership and run it as a state-operated commercial entity. The initiative is part of the NTA’s annual budget for the fiscal year 2082/83, launched as Ncell’s 25-year operating license nears expiration.

According to the budget document, “The Government of Nepal will acquire ownership of Ncell Axiata Limited and develop a commercial operation framework by studying the necessary technical, financial, and managerial aspects for its telecommunications services.”

Under Section 33 of the Telecommunications Act, if more than 50 percent of a telecom company’s capital is owned by foreign investors, all assets — including land, buildings, machinery, and equipment — automatically transfer to the Government of Nepal once the 25-year license period ends. Currently, foreign investors hold 80 percent of Ncell’s shares.

Ncell obtained its GSM mobile service license on 16 Bhadra 2061, valid until 15 Bhadra 2086, meaning it will come under government ownership in about three years and ten months.

Preparatory Work Underway

To ensure a smooth transition, the NTA will conduct a detailed study to design a commercial operation framework. An NTA official confirmed that Rs 1 million has been allocated for the study this fiscal year.

“This initiative has been included in this year’s budget,” the official told TechPana. “A committee will soon be formed, and the Terms of Reference (ToR) are being drafted. The study will proceed based on prior decisions made by the Council of Ministers.”

Cabinet’s Earlier Decision

The Council of Ministers, led by then Prime Minister Pushpa Kamal Dahal, had already addressed Ncell’s ownership issue in its 17 Falgun 2080 meeting, when Rekha Sharma was serving as Minister for Communications and Information Technology.

The cabinet had decided that Ncell would be brought under government ownership upon license expiry, provided its technical, financial, and managerial capabilities to operate telecom services were verified. The decision also instructed that no changes be made to the company’s shareholding structure during license renewal.

Ncell’s license was renewed for a final five-year term last year under these same conditions after completing 20 years of operation.

The cabinet statement at the time read:

“If the technical, financial, and managerial capacity of the licensee ensures service continuity, the license will be renewed without altering the share ownership structure. This guarantees that ownership of assets related to telecom services remains with the Government of Nepal under Section 33 of the Telecommunications Act, 2053.”

Axiata’s Exit and Ownership Dispute

On 13 Mangsir 2080, Axiata Group Berhad of Malaysia announced its decision to exit Nepal, citing increasing commercial difficulties. The company sold its 80 percent stake in Ncell to Spectralite UK, a British firm owned by Nepali businessman Satish Lal Acharya.

However, the Government of Nepal has not yet recognized this transaction, and official records still list the company as Ncell Axiata Limited.

What Comes Next

Once the NTA’s study determines the best commercial operation model, the government will conduct a Due Diligence Audit (DDA) of Ncell.

The Telecommunications Act authorizes the government, in consultation with the NTA, to form a five-member committee to assess the company’s valuation.

Additionally, the law allows the previous license holder to reapply for a new license and continue operations — but only after paying the valuation amount set by the government-appointed committee.