Ncell wins auction to use residual spectrum in 1800 MHz band

Published On: December 19, 2019 09:19 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 19: Nepal Telecommunications Authority (NTA) has selected Ncell to use residual spectrum in 1800 MHz band on condition that it first settles outstanding capital gains tax (CGT) dues with the government.

Ncell was selected through a frequency auction held in Kathmandu on Wednesday. State-owned Nepal Telecom (NT) was the other participant at the auction.

NT has been utilizing 15 MHz of its maximum limit of the spectrum, while Ncell has been using 9.5 MHz of the band limit provided to it. 

Frequency spectrum is one of the important resources in the telecommunication sector without which operators cannot start wireless mobile service. The company with higher frequency spectrum can provide efficient services to its customers.

According to the authority, Ncell was selected through the auction after the company bid higher price than the NT. In the third round of auction, Ncell bid Rs 58 million for the frequency while Nepal Telecom proposed to purchase the frequency for Rs 50.01 million.

Min Prasad Aryal, the spokesperson for the NTA, told Republica that the authority held the auction for 900, 1800 and 2100 band frequencies, out of which Ncell has been selected for the residual spectrum of 1800 MHz band. According to Aryal, the authority was yet to award contract to the Ncell allowing it to use the 4G frequency. “The company should first pay outstanding taxes to operationalize the frequency,” added Aryal.

In the controversial tax issue of Ncell, the Supreme Court last month asked the private telecommunication operator to pay Rs 21.10 billion in capital gains tax. Last April, the Large Taxpayers' Office had asked the operator to pay Rs 39.06 billion in capital gains tax, following which Ncell had moved the apex court seeking annulment of the decision taken by taxmen. The private company, however, is yet to clear the amount. 

According to Aryal, the spectrum will enable the concerned telecommunication operator to enhance the speed of 4G service at a low cost and also expand its coverage.

Although other private sectors companies – Smart Cell, UTL and CG Telecom – had also showed interest to participate in the bidding process, the authority did not accept stating that they had failed to abide by the existing laws.

Aryal said Smart Cell and UTL are yet to clear the dues of frequency that they are using, while CG Telecom has not been granted unified license yet. According to him, Ncell will be allowed to expand its services even in 3G service and advanced telecommunication services such as 5G to be launched in future. 

Last December, the NTA had unveiled plan to auction off the three frequency spectrum. However, authority had stepped back after the Supreme Court stayed the proceedings. 

At present, the Nepal Telecom has been using the spectrum of 800 MHz and some of 1800 MHz band to provide 4G service. The frequency in the 800 MHz band is considered suitable in areas where the population density is low while the one in higher range can offer improved services even in highly populated areas.

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