Telcom Service Providers welcome proposed Merger Bylaw
KATHMANDU, May 12: Telecom service providers have welcomed Nepal Telecommunications Authority (NTA)´s proposed Merger and Acquisition Bylaw, which encourages smaller players to undergo merger, with request of some minor amendments.
With the objective to consolidate growing number of telecom service providers, NTA had prepared a draft of Merger and Acquisition Bylaws on March 25 seeking feedback from the operators.
Subash Bajracharya, ceo of Smart Cell said it was a positive step of NTA as it paved the way for merger.
“The implementation of the policy will open the door for operators to go for merger or acquisition,” he said.
NTA has proposed waiving off license renewal fee of the operator which has low renewal fee while undergoing merger. The merger entity will have to renew the single license, the one which expires earlier among entities.
Operators appreciated the authority´s efforts to maintain market competition by not allowing operators to go for merger if the market share exceeds by 40 percent. The proposal is encouraging for small operators,” he said.
Internet service providers have also given green signal to the draft which has proposed tax exemption for those entering into merger, wherever possible.
Binay Bohara, president of Internet Service Providers´ Association of Nepal (ISPAN) said although the proposal looked little bit tricky for market expansion, the step was positive. “The implementation of the policy will discourage unhealthy competition and at the same time maintain healthy competitiveness,” he said adding the proposal provided opportunities for small operators to merge and compete against the huge operator.
Some of the operators however opined the proposal hadn´t covered many issues and focus was more on less important things. They suggested the authority to be clearer and more flexible in spectrum allocation to encourage them.
NTA spokesperson Kailash Prasad Neupane said, “The draft was the consultation paper and feedback of the operators and stakeholders would be considered while giving the bylaws the final form.”
According to the proposed bylaws, only the firms licensed at least four year ago will be eligible for the merger. The proposal further asks firms to clear outstanding royalty to the government before entering into merger.