Nepal's UTL telecom licence lapses with about Rs 31 billion unpaid

What happened

UTL received its basic telephone service licence on 5 September 2016. According to The Kathmandu Post, such licences can run for up to 25 years but are issued in 10-year periods, so the company had to renew before the first period ended. UTL applied for renewal on 3 June 2026, three months before the deadline as the rules require. However, it did not pay the renewal fee or its older dues, and the deadline passed on 4 September.

The Post broke down the dues. The renewal fee alone was Rs 20 billion. Late fees and penalties added more than Rs 3 billion. Unpaid royalty, contributions to the Rural Telecommunication Development Fund (RTDF) and frequency fees came to more than Rs 7.5 billion. Together, the amount was about Rs 31 billion. NTA spokesperson Min Prasad Aryal said the licence could not be renewed until the dues were paid in full.

UTL asked for more time. It offered to pay about Rs 13.5 billion within 30 days of approval for a proposed $500 million foreign investment, and the rest over ten years. It asked for Covid-19 to be treated as force majeure, for help moving its 2G and 3G licences to 5G, and for frequency fees to be waived for periods when frequencies were unused. A UTL director, speaking anonymously, said Nepal Telecom and Ncell had been allowed to pay renewal fees in instalments.

The regulator did not accept these terms. On 1 October, Ratopati reported that the NTA confirmed the licence had been cancelled automatically because it was not renewed in time. The NTA decided to recover more than Rs 8.5 billion in government arrears, to speed up forming a committee to take control of UTL's assets, and to freeze its bank accounts.

The engineering behind it

Telecom is a business where large fees come before any income. As general knowledge, an operator pays for a licence and for the right to use radio frequencies, then spends heavily on towers, radio equipment, fibre and core network systems. Revenue arrives only after customers sign up. If an operator cannot build a large enough customer base, the fixed costs of licences and spectrum can exceed what it earns. Engineers who plan networks therefore work closely with finance teams, because the number of sites and the speed of rollout depend on how much money is available.

Spectrum is the scarce resource. In general, each operator is assigned blocks of frequencies, and the amount of spectrum it holds limits how much data its network can carry. Frequencies that are not used still cost the state an opportunity, which is why regulators charge for them whether or not they carry traffic. UTL's request to waive fees for unused periods shows the tension between a struggling operator and a regulator that must treat all licence holders the same way.

Moving older licences to newer technology is also a technical question. UTL asked for help moving its 2G and 3G licences to 5G. In general, newer mobile generations carry far more data on the same amount of spectrum, but they need new radio equipment, new core network software and phones that support them. Converting a licence does not build a network. The operator still needs capital to deploy equipment.

What it means in Nepal

UTL's ownership shows how foreign investment works in Nepali telecom. The Post reports that it is 80 percent foreign-owned and 20 percent Nepali-owned. Its Indian shareholders are Mahanagar Telephone Nigam Limited, Telecommunications Consultants India Limited and Tata Communications, each with about 26.7 percent. The Nepali shareholder, Nepal Ventures, holds 20 percent and is owned by Raj Bahadur Singh, who is also UTL's chairman.

UTL also tried to borrow to pay the government. The Post reported that it arranged a 5 million foreign loan and sent the application to Nepal Rastra Bank and the Department of Industry on 25 August. The central bank returned the documents on 3 September, one day before the deadline. UTL also said that an application it made in 2014 to expand capacity and raise capital was still undecided. The anonymous director said these delays had discouraged foreign investors.

UTL's failure also had effects beyond its own customers. In August 2025, NepaliTelecom reported that UTL had first been given the job of building an optical fibre backbone in Gandaki and Lumbini but could not proceed, so the work later passed to Nepal Telecom. Unused licences and unfinished projects can delay services that the public was expecting.

The NTA's decisions in the same meeting show where the sector is moving. According to Ratopati, the authority approved a document to start bidding for the 800 megahertz band, formed a sub-committee to finalise Nepal's 5G roadmap, and told Ncell to submit an asset transfer plan under the regulations on telecom operators' assets. For engineers, the lesson is that network plans depend on licences, spectrum and finance as much as on technical design.