Ncell’s Letter to the Prime Minister Raises Alarm Over Telecom Policy, License Renewal, and Investment Security

13th January 2026, Kathmandu

Nepal’s telecommunications sector is passing through a critical phase. Policy uncertainty, regulatory inconsistency, and investment-related risks are now affecting service continuity and investor confidence.

Ncell’s Letter to Prime Minister

In this context, Ncell Axiata Limited has submitted a detailed letter to the Prime Minister, raising serious concerns and proposing policy reforms.

The letter does not focus on corporate privilege. Instead, it highlights issues of equal regulation, investment security, and consumer rights. Ncell argues that inconsistent treatment among similar telecom operators threatens not only one company but the entire digital ecosystem of Nepal.

Core Issue: Unequal Regulatory Treatment

At the heart of Ncell’s letter lies one key argument: similar service providers are being treated differently.

The company claims that decisions related to license renewal, interest charges, share ownership restrictions, and regulatory conditions have been applied unevenly. According to Ncell, such practices undermine fair competition and weaken trust in Nepal’s regulatory environment.

The letter specifically compares its situation with Nepal Telecom, alleging that while Nepal Telecom received a license renewal without interest, Ncell was required to pay installments at 10 percent interest. The company says this has imposed an additional financial burden worth billions of rupees.

Ncell’s 21-Year Contribution to Nepal

Ncell highlights its long-standing presence in Nepal. For over 21 years, the company has provided telecom services to more than 14 million users across the country.

During this period, Ncell claims to have contributed more than NPR 360 billion in state revenue. It has also generated thousands of direct and indirect jobs. These contributions, the letter argues, show that Ncell is not a short-term investor but a long-term partner in Nepal’s development.

The company also states that it has spent over NPR 2 billion on Corporate Social Responsibility (CSR) programs. These include healthcare services in remote areas, educational support, environmental protection initiatives, disaster early warning systems, and sponsorship of national sports events.

Telecom Services and Fundamental Rights

Ncell emphasizes that telecommunications services are no longer optional utilities. They form the backbone of constitutional rights related to information and communication.

The letter warns that any disruption in mobile or internet services would directly affect education, healthcare, banking, digital payments, e-government services, and emergency communications. With over 10 million active users, service instability could create serious public-interest risks.

From this perspective, Ncell argues that telecom regulation must prioritize continuity, stability, and fairness.

Foreign Investment at Risk

Ncell positions itself as a successful foreign investment model in Nepal. It credits foreign investment for technology transfer, skill development, and improved service quality through competition.

However, the company warns that inconsistent policies and retrospective regulatory changes send a negative signal to international investors. If successful investments face uncertainty, future foreign direct investment (FDI) could decline sharply.

The letter cautions that weakening investor confidence may have long-term consequences for Nepal’s digital and economic growth.

Declining Health of the Telecom Sector

The letter also paints a broader picture of the telecom industry’s challenges.

According to Ncell, the sector’s contribution to GDP has fallen from 4 percent to around 1.5 percent. The reasons include:

• High taxation

• Expensive spectrum fees

• Rapid growth of OTT platforms

• Policy instability and regulatory uncertainty

These factors, the company argues, are reducing profitability and weakening long-term investment capacity across the sector.

Dispute Over License Renewal Conditions

Ncell challenges cabinet decisions dated November 22, 2023 (2080/11/06) and August 29, 2024 (2081/05/13). These decisions allowed the renewal of Ncell’s mobile service license for five years but imposed strict financial and structural conditions.

The company claims these conditions are unlawful, discriminatory, and contrary to investment-friendly principles. It has asked the government to review these decisions to ensure service continuity and investment protection.

Share Ownership and Pre-Approval Controversy

One of the most sensitive issues raised in the letter relates to share ownership transfer.

Telecom regulations require prior approval for share transfers exceeding 5 percent. However, Ncell explains that compliance was practically impossible due to:

• Mandatory disclosure rules of the Malaysian Stock Exchange

• Provisions under Nepal’s Foreign Investment Act, 2019, which require post-transaction notification within 30 days

Ncell states that it submitted all required documents within the legal timeframe after the transaction. Rejecting the transaction despite this, the company argues, contradicts the intent of the law and discourages foreign investors.

Operational Capacity Already Proven

The government has raised questions about Ncell’s technical, financial, and managerial capacity. In response, the company argues that two decades of uninterrupted service already prove its capability.

Ncell also notes that it has strengthened operations through experienced international management teams and continuous service upgrades.

Moreover, the company argues that license renewal itself is proof of regulatory acceptance. Questioning capacity after renewal, it claims, reflects a double standard.

Tax Compliance and Public Perception

Addressing tax-related concerns, Ncell states that it has already paid over NPR 1.69 billion in taxes following share transactions. It also commits to paying any additional taxes determined under the law.

The company expresses concern that public accusations of tax evasion have damaged its reputation, despite ongoing compliance.

Property Rights and Legal Principles

Ncell argues that restrictions on share ownership transfers violate constitutional property rights. Such actions, the letter says, raise serious questions about investment security.

It also criticizes retrospective regulatory amendments that affect past investments. According to Ncell, changing rules after investments are made undermines the rule of law and policy stability.

Key Demands from the Government

Ncell makes it clear that it is not seeking special treatment. Instead, it asks for:

• Equal regulatory standards

• Removal of discriminatory conditions

• Review of interest charges

• Recognition of share transactions through proper regulatory processes

The company stresses that fairness and consistency are the foundation of sustainable regulation.

Commitments for the Future

Despite current challenges, Ncell reaffirms its commitment to Nepal.

The company pledges to:

• Ensure uninterrupted telecom services

• Invest in new technologies

• Increase Nepali ownership through an IPO

• Support the Digital Nepal initiative

However, it emphasizes that these commitments depend on a stable, transparent, and investment-friendly policy environment.

A Broader Policy Debate

Ncell’s letter goes beyond a single corporate dispute. It raises fundamental questions about regulatory fairness, foreign investment protection, and consumer rights.

As Nepal pushes toward a digital economy, the outcome of this issue may shape the future of its telecom sector—and its credibility as an investment destination.

For more: Ncell’s Letter to Prime Minister