The parliamentary Public Accounts Committee (PAC) reacted instantaneously to the launch of 4G service by Ncell in the Kathmandu Valley on Thursday by saying it had ‘serious reservations’.
The House panel told the Post that it would call a meeting next week to take a formal position over the issuance of 4G licence to the private telecommunications service provider.
The PAC had recently told the Nepal Telecommunications Authority (NTA) not to issue a permit until Ncell’s capital gains tax issue was settled. Despite the order, the regulator had gone ahead and issued the permit to Ncell as it had received the green light from the parliamentary Development Committee on April 26.
“We have taken this issue as a ‘serious offence’ of the parliamentary committee,” said PAC Chairman Dor Prasad Upadhyay. “A meeting will be called next week.”
When asked about the position of the regulator, NTA Chairman Digambar Jha had said last week that it would abide by the PAC’s fresh directive.
“I have heard about the PAC’s decision, but I haven’t read it,” he told the Post last week, adding that they were confused after being given two opposing directives.
The Post’s repeated attempts to contact Jha on Thursday were unsuccessful.
The NTA was supposed to call a board meeting to reach a decision on the directives. However, before it could do so, Ncell began 4G services in the Kathmandu Valley.
All Ncell customers possessing USIM with 4G compatible handset will be able to experience 4G from Thursday in the Valley and adjoining areas like Nagarkot, Banepa and Dhulikhel.
“The service is being launched in line with the technology neutrality permission, which paved the way for the company to provide customers what they have long deserved,” said Ncell in a statement. The company added that it was planning and testing 4G services in 40 other cities nationwide.
PAC Chairman Upadhyay said they weren’t satisfied with the NTA’s answer that it had not allowed Ncell to use additional frequency to roll out 4G service.
“The company has rolled out 4G service on its existing frequency of 900 MHz and 1800 MHz as per the technology neutral spectrum provision.”
The provision of technology neutrality is incorporated in the Frequency Policy 2016, and it allows service providers to launch or implement any technology or service on the frequency band they own.
While the NTA’s statement sounds ambiguous, the decision made by the Development Committee had been perfectly timed as the first phase of local elections was scheduled for May 14, which ensured that PAC wouldn’t be able to look into the matter immediately, a number of lawmakers said.
In the biggest corporate buyout deal in Nepal, Swedish telecom giant TeliaSonera sold its stake in Ncell to Malaysian company Axiata for $1.03 billion in 2015. The government has clearly said that 25 percent of the profit made from the sale of Ncell should be deposited as capital gains tax, but it has not mentioned the amount.
Following pressure from the government, Ncell has so far deposited Rs9.97 billion as 15 percent withholding tax, or tax deductible at source for capital gains. The payment of this tax amount means the seller earned Rs66.46 billion by divesting its shares in the telecom company. This tax amount had been calculated by Ncell itself.
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