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Kathmandu, August 13. The Cabinet meeting on Thursday decided to renew Ncell’s mobile service license for the third time in four installments at an annual fee of US$5 billion plus interest.
The government has decided to renew the phones after paying the first of four installments of 20 billion. Government spokesperson and Transport Minister Prithvisubba Gurung said that while the first installment paid by Ncell will not incur interest, the renewal process has already been initiated, so the second installment will pay interest at a rate of 10%.
“We have decided to grant renewal permission with interest at 10 per cent,” Gurung said. “So, we will send a letter to the Telecom Regulatory Authority.
Previously, Ncell applied for renewal with the Nepal Telecommunication Authority in May. According to the government, Ncell paid $6.4 billion during the transformation period, of which $3.5 billion is the royalties for next year. Within the $5 billion, there are $750 million in royalties. Ncell paid the royalties for five years in one lump sum. Therefore, the first installment still needs to pay $4.025 billion.
When he pays off the installments in the second year, his expenses will be reduced by 3 billion, leaving 17 billion. In the second year, after paying the interest of 12 billion 750 million rupees, he will have 4 billion 250 million rupees left. In the third year, he will still owe 8 billion 500 million, and after adding the interest, he will pay off 4.25 billion, and pay off the arrears at 10% interest.
The license obtained is valid for 25 years and can be used for 10 years without renewal. Thereafter, it must be renewed every five years. Ncell has decided to provide an installment payment facility with four installments and an annual interest rate of 5 billion for the third renewal of the mobile service license.
Minister Subba Gurung said Ncell had to pay the government $2.55 billion in interest as the interest had to be paid in three installments.
Ncell had its first renewal in 2069. At that time, a sum of 30 billion was paid to the government in eight installments. The second renewal was in 2076 at the rate of 4 billion in five installments. Now there are only five years left in the license period.
“If he pays the principal in advance, he will not get interest, otherwise that is the arrangement,” Gurung said.
Ncell’s operating license will expire on August 15. Although he proposed renewal to the Telecommunications Regulatory Authority three months ago, the government took some time to make a decision.
Ncell accused the government company Nepal Telecom of cheating it. An official of Ncell said that the government’s action was absolutely unfair.
It is clear that the government has never shown equality and this time is no different. Despite a five-year delay in renewing its license for the third time, Nepal Telecom took only 20 billion without charging any fees, penalties or interest. Similarly, no interest or penalty was levied even during the first and second renewal instalments,” the source said. He said Ncell was discriminated against by charging 10% interest.
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