July 12: Following the government’s announcement in the budget to issue 22 percent shares of Nepal Telecom to the customers using landline, mobile and internet services, it has initiated preparations to implement the announcement. 

The budget provision allows customers using Nepal Telecom's landline, mobile and internet services till the mid of January 2021, to participate in the purchase share. The Ministry of Finance has started necessary preparations to finanalize the value of the company's share and its distribution process by mid-October. 

According to the officials of the Ministry of Finance, Ministry of Communication and Information Technology (MoCIT), Nepal Telecom (NT), they have initiated paperwork to implement the program as announced in the budget. Dirgharaj Mainali, joint secretary of the Ministry of Finance (MoF), informed that it has started necessary homework to implement the programme with new vision though such programs have not been introduced in the past. The company has been formed with the service fee paid by the service seekers so a new model will be finalized to hand over the ownership of the company to customers themselves. 

"This issue has already been researched so the government is preparing an action plan to implement this programme. The action plan is being formulated in coordination with the NT, MoCIT, MoF. MoF will be leading this project," said Mainali.

Some provisions need to be added in the Privatization Act to issue shares of NT  to the customers. Preparations have been made to add the provisions through a Cabinet decision. There is a privatization committee chaired by the minister, which also includes the secretaries of the concerned ministries. MoF is preparing to take the proposal to the Cabinet after completing the required process as per the Privatization Act.

The Privatization Act does not envision this kind of concept as announced in the budget program. It does not envisage the idea of ​​issuing shares to the customers themselves.  Finance ministry officials say there is a need to move forward on the basis of share disinvestment provisions. Discussions have already started between the privatization committee and the Securities Board of Nepal on the model through which the shares will be distributed. 

According to MoF sources, the government made this announcement in the budget aiming to increase the number of telecom customers. The government currently owns 92 percent shares of Nepal Telecom and the public hold the ownership of the remaining eight percent of shares. When the public will be issued with additional shares, government's ownership will be reduced to 70 percent.

MoCIT is also working with the concerned departments for this.  Sobhakant Poudel, joint secretary of MoCIT said that the NT board has the full authority to decide on the share ownership of the company. "The budget has already stated about the public shares offering so it will be implemented in time," Poudel added. 

Discussions have been ongoing since the tenure of former MoCIT Minister Gokul Baskota about issuing shares or bringing in a strategic partner. Banskota was against the idea of bringing in a strategic partner.  He was of the view to issue shares to the public and expand its customer base.

Nepal Telecom has also made necessary preparations to make the program announced in the budget a success. Dilli Ram Adhikari, managing director of Nepal Telecom, said that the decision would be taken by the board of NT after receiving the draft of the plan from the MoF. Since the budget announcement to issue shares to the public, the company has expedited the task of updating the KYC of the existing customers.

He said that the process will start after the work procedure of appointing share manager will be finalized.