Kathmandu: As the August 2029 expiration date for Ncell’s 25-year operating license approaches, a high-stakes debate has emerged regarding the future of Nepal’s telecommunications landscape.
Under the Telecommunications Act of 1997, licenses for telecom services are capped at a maximum of 25 years. This regulatory ceiling, coupled with the government’s recent decision to renew Ncell’s license for only the final five-year block, has sparked intense discussions on whether the private carrier will be forced to cease operations, transition to government ownership, or find a legal path to secure a fresh mandate.
Central to this controversy is the interpretation of Section 33 of the Telecommunications Act. Ncell recently submitted a detailed letter to the Prime Minister’s Office and relevant ministries, arguing that the law does not mandate a wholesale transfer of the company to the state.
The company contends that while the law requires the transfer of physical assets such as land, buildings, and equipment to the government for providers with more than 50 percent foreign investment, it does not dissolve the corporate entity or its shareholding structure. Furthermore, Ncell highlights a specific provision within the same section that allows a company to re-acquire those assets at a government-determined value to continue providing services under a new license.
The economic implications of Ncell’s potential departure are staggering. Since its inception, the company claims to have contributed approximately Rs 375 billion to the national treasury through various taxes and fees. As one of Nepal’s largest taxpayers, Ncell warns that any disruption to its services would result in a significant loss of regular government revenue derived from frequency fees, service charges, and corporate taxes.
Beyond direct revenue, the company argues that it serves as a critical litmus test for Foreign Direct Investment (FDI) in Nepal. Investors are closely watching how the government handles Ncell’s transition; a move perceived as hostile or legally inconsistent could send a chilling message to global investors regarding the security of their assets in the country.
Technological advancement is also at a crossroads. Ncell has expressed that the current regulatory ambiguity is hindering massive investments required for the rollout of 5G technology, the expansion of data centres, and the integration of Artificial Intelligence. Because telecommunications infrastructure involves long-term, capital-intensive projects, the company insists that policy clarity is essential to justify spending on network upgrades and tower construction. Without a clear vision for the post-2029 era, the company warns that Nepal risks falling behind in the global digital race.
From a consumer and social perspective, the stakes are equally high. With a subscriber base of nearly 14 million, a sudden exit of Ncell would create a vacuum that other service providers would struggle to fill immediately, potentially leaving millions, especially those in remote areas, without mobile or internet connectivity.
This disruption would ripple through the entire digital economy, affecting mobile banking, fintech platforms, ride-hailing services, and e-governance initiatives that rely on Ncell’s infrastructure. Furthermore, the livelihoods of over 100,000 individuals directly and indirectly employed through Ncell’s ecosystem, including distributors and technical partners, would be placed at immediate risk.
In an effort to align with national interests and resolve the impasse, Ncell has put forward a proactive proposal to restructure its ownership. In its latest correspondence with the government, the company suggested a roadmap to increase Nepali ownership to over 50 percent and eventually transition into a public entity through an Initial Public Offering (IPO).
This plan includes ensuring public representation on the board of directors and a commitment to launch 5G services within a year of becoming a majority Nepali-owned company.
Following a recent Supreme Court directive suggesting that ownership disputes be resolved through administrative channels, the responsibility now lies with the Cabinet to determine a path that balances legal compliance, national interest, and the continuity of essential digital services.
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