UTL approached the government for royalty review after the Appellate Committee under the Ministry of Information and Communications turned down the appeal for waiver of its outstanding royalty to the Nepal Telecommunication Authority (NTA) - the telecom regulator.[break]
"We are ready to clear the dues, but only if the government waives off certain percentage of the amount," Arun Gupta, chief executive of UTL, said at the sub-committee meeting of the parliamentary Public Accounts Committee (PAC) on Monday.
He argued that waiver was necessary particularly as delayed decision by the regulator affected their service expansion plan, inflicting huge loss to them.
While obtaining operating license, UTL had committed to pay royalty ranging from Rs 20 million in the year of establishment to around Rs 370 million in 2012/13 on annual basis.
According to NTA, UTL has been paying just four percent of its revenue, which is not sufficient to clear royalty as per the requirement. UTL´s outstanding dues to the government amount to Rs 896 million.
As per the Telecommunications Act, telecom operator has to pay four percent of their revenue or the commitment fee, whichever is higher.
“We´ve been facing loss and there is lack of a level playing field,” Gupta said, adding that it was not fair to expect UTL to comply with the agreement while the other party was not following it.
UTL officials have requested the lawmakers to waive off some amount from its outstanding dues as it has been making losses. “We´ve made huge investment, but we couldn´t earn as per our expectation,” UTL Chairman Kuldip Singh said.
On the other hand, NTA chairman Bhesh Raj Kanel said the regulator was not in a position to waive off UTL´s outstanding dues. “The outstanding dues are to be paid to the government and it is the amount that UTL has committed,” Kanel said, adding that it was not justifiable to seek waiver time and again for the same reason.
The government had earlier waived off the committed royalty of UTL worth around Rs 190 million for the period when the then King Gyanendra Shah seized the power and restricted operations of telecom operators.
Kanel further added that other operators will seek royalty waiver if UTL´s royalty is waived off.
The sub-committee of PAC formed to probe irregularities in frequency distribution and revenue issue has already summoned officials of other operators for discussion.
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