Ncell’s 4G license to be withheld

The Nepal Telecommunications Authority (NTA) has backtracked on its decision to grant Ncell a 4G license in response to a directive from the parliamentary Public Accounts Committee (PAC).

The committee recently directed the regulator to prevent Ncell from launching 4G services until an ongoing dispute over capital gains tax is settled. The NTA has announced it will abide by this decision.

Ncell was granted approval earlier this month to launch 4G services despite an earlier decision by the PAC not to allow the launch until the tax dispute is settled.

In making its decision, the NTA said the directive has been issued in the spirit of Nepal’s technology neutral spectrum policy, as well as in response to a finding from Nepal’s Development Committee that withholding a license would negatively affect consumers and state funds.

The tax dispute revolves around the sale of Sweden’s TeliaSonera’s indirect majority stake in Ncell to Malaysia’s Axiata for $1.03 billion in 2015.

But the government has been split on whether the tax should be paid by the buyer or the seller and may require Ncell to pay on behalf of the international companies. There is also disagreement over whether Nepalese tax law even applies to the transaction, as it involved the sale of a holding company listed in a tax haven.