KATHMANDU, Feb 4: The government is increasing the equity of the general public in the state-owned Nepal Telecom (NT) by threefold from the existing stake of 8.47 percent.
The government in a bid to restructure the NT has decided to increase the stake of the general public in the NT to 25 percent. In this regard, the government is all set to offload its 16.53 percent of the shares to the general people, according to the Ministry of Communications and Information Technology.
Speaking at a program organized to mark the 21st anniversary of the NT, Minister for Communications and Information Technology Prithvi Subba Gurung said the government is considering increasing the public shareholders in the NT to 25 percent by the end of the current fiscal year. According to him, a study committee formed to improve the NT performance has also recommended the same.
At present, the NT currently has a paid-up capital of Rs 18 billion, with 91.53 percent (Rs 16.47 billion) owned by promoters, including the government, while only 8.47 percent (Rs 1.52 billion) is held by the general public.
Minister Gurung stated that the current situation prevents Nepal Telecom from functioning effectively and emphasized that the only option for improvement is changing the capital structure. "As the NT's working efficiency appears to be declining, we cannot afford to delay the review any longer," he said.
Gurung directed the NT to accelerate the 4G network expansion, cautioning that further delays in improving service quality and infrastructure would no longer be tolerated. He expressed frustration over Nepal Telecom's weak presence in Madhesh Province.
In recent days, the NT’s financial performance appears depleting due to a number of reasons. It earned net profit of Rs 6.61 billion in fiscal year 2023/24, down from Rs 7.92 billion in the previous year. Likewise, the dividend distributed by the state-owned enterprise also dropped to 30 percent from 55 percent in the past five years.
Issuing 150 million shares to general people, the NT for the first time went public in the FY 2007/08. Time and again the government had announced its plan to divest its shareholding to increase the stake of the general public at the NT. In 2021, the then Minister for Communications and Information Technology Parbat Gurung also took forward a proposal of allocating 22 percent of the company’s shares to service users. However, the plan failed to materialize.