Indian telecom JV reels under step-motherly treatment in Nepal

January 18th, 2011 - 5:28 pm ICT by IANS  

By Sudeshna Sarkar
Kathmandu, Jan 18 (IANS) Nepal’s first private telecom operator continues to reel under the stepmotherly treatment meted out to it by deposed king Gyanendra’s regime in 2005, with its business plan in ruins and equipment worth crores of rupees lying idle due to the government dragging its feet on fulfilling its obligations.Now, to make matters worse, Nepal Telecom Authority (NTA), the telecom regulator in the Himalayan republic, is threatening to cancel the licence issued to United Telecom Ltd (UTL), a joint venture between India’s Mahanagar Telephone Nigam Ltd, Telecommunications Consultants India Ltd and Tata Communications Ltd with Nepal Ventures Pvt Ltd, unless it pays over NRS 89 crore to it within this month.

The NTA threat overlooks the harassment UTL underwent in 2005, when King Gyanendra seized absolute power with the help of the army and all phone lines in Nepal were disconnected for some time.

All UTL lines were disconnected for 46 days and even after other phone companies resumed service, its phones were obstructed for more than six months, ruining the image of the company. The crackdown was undertaken to give special advantages to a newly- launched mobile telephone company chaired by the king’s son-in-law Raj Bahadur Singh.

During the nearly two years of the royal regime, UTL suffered discrimination, obstructions and even a law suit, causing it a loss of NRS 444 crore in 2005 alone.

After the royal regime was ousted and a new coalition government took over, it agreed to waive royalties. However, it refused to pay the Indian JV compensation for the loss it suffered, both to its business and image, and dragged its feet on allowing interconnectivity and other obligations of its own.

UTL also suffered the vagaries of the following ruling alliances with the Girija Prasad Koirala government asking it, in an unprecedented turn of events, to provide permanent employment to striking workers who had been hired by a third-party contracting company.

On Monday, the Indian JV wrote to the NTA, outlining its losses and explaining why, as per past agreements, it should not be asked to pay royalty for past years.

Even before the company heard from the NTA, the letter was leaked to the media.

The new trouble comes as Indian Foreign Secretary Nirupama Rao Tuesday began a three-day official visit to Nepal.

Among other bilateral matters, the Indian official is also expected to raise the issue of Indian JVs in Nepal and the discrimination they face.

(Sudeshna Sarkar can be contacted at

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