Ncell Seeks Approval to Sell Majority Stake to Nepali Investors

Private telecom operator Ncell has urged the government to allow it to sell a majority stake to Nepali citizens and institutions, transforming the company into a Nepali-owned entity, instead of taking it under state control after the expiry of its operating licence.

Ncell made the request while asking the government to revise a Cabinet decision and subsequent amendments to the Telecommunications Regulation that mandate government ownership of telecom companies once their licence period ends.

The company said that if the government ensures an environment for uninterrupted service even after the licence expiry, it is ready to increase investment nationwide in advanced telecommunications technology, high-speed fibre networks, expansion of services in remote areas, and the development of digital platforms and a broader digital ecosystem.

Section 33(1) of the Telecommunications Act, 2053 states that land, buildings, machinery, equipment and infrastructure related to telecom services—where foreign individuals or institutions hold more than 50 percent investment—shall transfer to government ownership once the licence period expires. The Act also allows previous operators to reapply for a licence after the government evaluates the assets and receives payment accordingly.

Ncell’s licence expires in September 2029, and uncertainty surrounds the company’s future thereafter. Ncell said it wants to reduce foreign ownership by changing its shareholding structure before the licence expires, which would prevent the company from transferring into government ownership.

While the existing Telecommunications Act does not restrict such ownership changes, Ncell claimed the government deliberately introduced the 10th amendment to the Telecommunications Regulation through a Cabinet decision to block share transfers in contradiction to the Act. The company insists the move is unlawful.

On Wednesday, Ncell officials submitted a memorandum to the Prime Minister’s Office, the Ministry of Communications and Information Technology, the Ministry of Industry, Commerce and Supplies, the Nepal Telecommunications Authority (NTA), and the Department of Industry.

“In order to ensure continuity of services beyond the 25-year licence period, we, the investors, are ready to engage with the Nepal Telecommunications Authority and the Government of Nepal to find an appropriate solution,” the memorandum stated.

As a proposed solution, Ncell said it is ready to increase the shareholding of Nepali citizens and institutions in Ncell Axiata Limited to over 50 percent, thereby establishing majority Nepali ownership, provided that Rule 7(A), added through the 10th amendment to the Telecommunications Regulation, is revoked.

The company also committed to selling shares to the general public through an initial public offering (IPO) or other means to ensure significant Nepali ownership and transform Ncell into a genuinely Nepali-owned company.

Ncell further claimed that the Cabinet decision of February 18, 2024, which directed licence renewals without any change in the existing shareholding structure, and the NTA letter dated September 1, 2024, issued to implement that decision, are unlawful.

According to Ncell, the intent of the Act is to assess foreign investment at the time of licence expiry, not at the time of licence issuance. However, the government amended the regulation to treat Ncell based on its original shareholding structure, the company said.  

Ncell also argued that the new rule, introduced by citing the provision of ownership transfer after 25 years under Section 33 of the Act, infringes on the fundamental property rights of foreign investors.

The company said rising use of over-the-top (OTT) services, high spectrum fees and excessive taxes have reduced telecom operators’ revenues. If the situation persists, telecom companies may struggle to meet even operational costs within the next three to four years, it warned, while urging the government to revise spectrum charges and service fees in line with market realities.

Ncell also called for clear policy and legal provisions that distinctly define licence fees, renewal charges, allocated spectrum, service conditions, and the roles and responsibilities of telecom and internet service providers.