A senior official of Nepal Telecommunication Authority (NTA) - the telecom sector regulator -- told Republica that the authority on Monday wrote a letter to the Ministry of Information and Communication (MoIC), informing it about the action it is planning to take against UTL for not complying with the agreement it signed while bagging the license and repeatedly defying its directives to settle royalty and fines.[break]
“We´ve requested the ministry to provide us security backup for the action," said a board member of NTA.
If the MoIC responded to its call, NTA will block all basic services of UTL, including wireless fixed line, leased line, STD and ILD gateway.
"Fundamentally, UTL´s license to operate Wireless Local Loop (WLL) service will be terminated. This will affect all its service, except the Limited Mobility Service (LMS)," the source elaborated. If that happened, more than 71,000 UTL subscribers will be affected.
Records show, UTL has a total subscriber base of 517,307. Of them, more than 71,000 are WLL subscribers.
"As we are shutting down the STD and international service gateway, customers of LMS will also be affected to some extent," the board member added.
Interestingly, UTL General Manager Madan Singh said he was not aware that the NTA deadline ended on Monday.
NTA had formally written to the UTL to settle all outstanding royalty, which stands at Rs 952.37 million, on Nov 29. It had also warned of stringent action in case the company continued to pay no heed to its directive.
NTA has issued two different licenses to UTL - basic and WLL. The licensing condition of WLL requires it to pay the commitment fee or 4 percent of its total revenue, which ever is higher, as royalty to the regulator. After UTL consistently ignored its call to settle royalty, NTA in March, 2010 had warned it of shutting down its services.
UTL, an Indian joint venture, interestingly, refused to bow down to the pressure and went on to file a case against NTA at the appellate committee of MoIC, claiming that it want compensation for loss it incurred due to the lack of committed support from the NTA. The company said it failed in the tough competition due to the regulator´s apathy and claimed it was not in a position to clear the commitment fee.
Singh said UTL incurred loss as NTA didn´t assign clear spectrum which led to poor voice quality service, hampering goodwill of the company.
"Apart from that, NTA awarded us with ILD gateway only after two years of application and this led to loss of revenue worth more than Rs 4 billion from international traffic as there were no other players except the state-owned operator in the market then," he added.
Though the government waived off Rs 190 million for loss it faced due to telecom closure during the then King Gyanendra´s takeover, the committee rejected UTL´s plea for royalty waiver twice.
This leaves UTL with no option but to clear the dues or shut down the service.
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