Nepal Telecom Share Divestment: 30% Stake for Public in FY 2082/83 Budget

30th May 2025, Kathmandu

In a landmark decision set to reshape Nepal’s telecommunications landscape, the government has unveiled plans to divest 30% of its shares in the state-owned Nepal Telecom (NT) to the general public.

Nepal Telecom Share Divestment

This significant policy shift, announced by Finance Minister Bishnu Prasad Paudel during the presentation of the Fiscal Year 2082/83 (2025/26) budget, aims to enhance efficiency, competitiveness, and public participation in the telecom giant.

The move will drastically reduce the government’s current 91.53% ownership, increasing public shareholding in Nepal Telecom from its current 8.47% to 25%. This effectively triples the equity available to ordinary citizens.

According to the Ministry of Communications and Information Technology, the government is preparing to offload 16.53% of its shares in what is being hailed as one of the most ambitious share restructuring efforts in recent memory.

This strategic divestment is expected to:

Encourage greater private sector participation: By reducing direct government control, the move aims to attract more private investment and foster a more dynamic market.

Enhance Nepal Telecom’s service quality and competitiveness: Increased public ownership and market pressure are anticipated to drive improvements in service delivery.

Restructure the capital structure for improved efficiency: A more diversified ownership base is seen as crucial for optimizing the company’s financial and operational performance.

Attract investment from the general public and institutional investors: This initiative opens new avenues for ordinary citizens and large investors to participate in the growth of Nepal’s largest telecom provider.

Minister for Communications and Information Technology Prithvi Subba Gurung, speaking at the 21st anniversary of Nepal Telecom, underscored the urgency of this reform. “The current structure is limiting NT’s potential, and it’s time to transform the capital structure to make the company efficient and competitive,” he stated, acknowledging the pressing need for change.

The decision comes amidst financial challenges faced by Nepal Telecom, including declining profits and reduced dividends. In FY 2023/24, the company reported a net profit of Rs 6.61 billion, a drop from Rs 7.92 billion the previous year, with dividend payouts falling to 30% from 55% in earlier years.

These financial headwinds, coupled with intensified competition from the private sector and lagging infrastructure development in certain regions, have accelerated the government’s push for reform.

While Nepal Telecom first went public in FY 2007/08, previous attempts by various governments to increase public ownership have often stalled due to bureaucratic hurdles and policy shifts. However, the current administration appears resolute in seeing through this 30% divestment, with a target for full execution by the end of the current fiscal year.

This landmark decision to increase public ownership in Nepal Telecom marks a pivotal turning point for the nation’s telecom sector. By reducing government control and inviting broader public participation, the initiative is poised to transform Nepal Telecom into a more dynamic, efficient, and customer-focused company, with stakeholders, investors, and telecom users nationwide keenly observing the unfolding developments.

For more: Nepal Telecom Share Divestment