Govt told to divest 30pc share to induct strategic partner in NT
KATHMANDU, Sept 25: A committee formed by the Ministry of Finance (MoF) has suggested to the government to divest up to 30 percent of its stake at Nepal Telecom (NT) in order to pave the way for induction of a strategic partner in the state-owned telecom operator.
The committee´s recommendation goes in line with what the previous teams had suggested. A high-level taskforce in 2010 had suggested to the government to invite a strategic partner by allowing it to own at least 26 percent equity at NT.
MoF Joint Secretary Baikuntha Aryal, who led the committee, submitted the report of its nearly two-month-long study to the finance minister, who heads the high-level privatization committee, on Monday.
In its report, the committee has suggested to the government to invite tender for selecting a strategic partner in two steps.
“In the first stage, the government should invite Expression of Interest (EoI). This will help it to identify potential partners,” said a source, citing the report. After shortlisting the best firms, the report then suggests to the government to invite Request for Proposal (RFP).
“Such modality has been proposed mainly because it will ensure selection of the best strategic partner for NT,” said a committee member, requesting anonymity.
Under the terms and conditions for the strategic partner, the committee has proposed that only those international firms that have a minimum of 20 million subscriber base and have been operating in profit for a few years should be allowed to participate in the bid.
Besides, the report also makes it mandatory for the selected partner to compulsorily install the equipment within the territory of Nepal in order to launch any kind of new technology.
“In other words, the committee has suggested that the government not allow the partner to introduce new services by installing system outside of Nepal,” said the source.
Sources said the committee´s report will be studied in detail by MoF, following which it will be sent to the cabinet for approval. It will be implemented only when the cabinet approves it.
According to NT officials, the submission of the report has paved the way for the implementation of the long-planned strategy to induct a foreign partner in the company.
“We are ready to work with a strategic partner. Our only hope is the government will deliver on its commitment and implement it,” a senior NT official said.
With increasing competition in the telecommunications sector, there has been growing demand for strategic partner in the state-owned operator.
Though still the best performing public enterprise, NT has lost the market leadership to private operator Ncell since July, 2012. It has a total subscriber base of 7.75 million and occupies 45 percent of the market share. Ncell, on the other hand, holds 48 percent market share as of August, 2012.