Nepal Telecom (NTC) has received relief from Patan High Court in the 2100 MHz band fee case. The court has released a full text of its verdict declaring that the provision in the Radio Frequency Policy 2069 stated in section 11 undermines the retrospective principle of law.
According to a recently released text, a joint bench of Justices Ramesh Dhakal and Durga Prasad Dhungel stated that the policy was not in line with the principle of law. And that would mean that Ntc won’t have to pay Rs 90 crore (Rs 900 million) for the frequency fees in the 2100 MHz band.
Ntc had filed a writ at the Patan High Court on Magh 29, 2080 over the band fees. The company received its 2100 MHz frequency in FY 2063/64 and has been paying Rs 1.20 crore (12 million) per MHz as a base rate. But during an auction in 2078 that Ncell participated too, the fee for the frequency was fixed at Rs 1.50 crore. Ncell secured 2×5 MHz frequency of 2100 MHz at the spectrum auction.
Ntc went to court against NTA stating that it was unfair that it would have to pay the new fee determined after the auction in 2078. The company had been paying Rs 1.20 crore (Rs 12 million) per MHz as basic fee for the 3G in the 2100 MHz band. The company received the frequency back in 2063 BS.
Check out: Frequency bands in Nepal for 2G, 3G, 4G, and 5G
The court has, however, refused to issue a dispatch order as per the petitioner’s demand.
Court rejects Nta rationale on 2100 MHz band fee payment
Earlier, NTA had informed Ntc and Ncell on Jestha 16, 2078 that the frequency fee fixed in 2078 will be applicable on 2100 MHz frequency from the date they received it. The court has explained that frequency fees, additional fees, and fines will be attracted only for the period after the authority informed the companies about the new fee structures. It means NTA shall not impose additional fines in the years prior to notifying the companies.
NTC used the 2100 MHz frequency for its 3G that it started in 2065. After a year in 2066, Ncell also started its 3G service. NTA maintains that both companies received the spectrums agreeing to the term that they would agree to pay for it at the price fixed later in the auction.
After both Ntc and Ncell refused to pay the fee NTA demanded, it resorted to actions. It has derailed telecommunication service expansion and quality-improvement plans.
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What did the Patan High Court also say on 2100 MHz frequency payment?
The Patan High Court has denied NTA’s legitimacy to demand the additional fee of Rs 90 crore from the Ntc. It has also issued a directive order to review the Radio Frequency (Allocation and Pricing) Policy of the Telecommunication Service, 2080.
Before the implementation of this policy, when determining the price of the 2100 MHz frequency that had been distributed, it used the price equivalent to the same amount as the band was auctioned. It has been stated that the provision to recover the amount from the date the frequency that was made available before the price policy established in the auction was implemented. The Court held that this opposed the principle of the law.
Patan High Court gives verdict that gives Ntc a sigh of relief
The court insisted that ‘no law or policy can impose a financial burden from an earlier period.’ The court held that it is legally invalid to try to implement the fees established by the auction held in 2078 BS from 2063 BS. It further added that such a decision from the regulator could send a message that operating a business in the country could be risky.
“The applicant company has been using the 2100 MHz band for the operation of 3G services for the fixed frequency fee of 2*10 MHz at the rate of Rs. 1.2 crore per megahertz per year since the date of obtaining the frequency. The intention of the Act is not that the authority can formulate a policy at any time. In a situation where the authorized body has delayed by not formulating the said policy on time, it is not lawful to say that the service provider should pay any fine or fee as per the policy even before receiving the information,” the full text of the decision states.
The court also mentions that limiting the 2100 MHz band to 3G services is against the principle of technology neutrality. It said that the practice has kept telecom companies from using it in newer technologies like 4G and 5G.
Now, Ntc won’t need to pay any additional fees of Rs 90 crore and a monthly interest rate of 2% from the month of Jestha 2078.
HAVE YOU NOTICED: Ncell has started Carrier Aggregation (CA) using the 2100 MHz, 900MHz band on its 4G network
The 2100 MHz band fee controversy affected the entire telecommunication industry
The case over the 2100 MHz payment has hurt the telecommunication industry. NTA has stopped foreign currency exchange recommendations to both Ntc and Ncell for their insistence on not paying for the frequencies in NTA’s terms. Due to this, Ncell has not been able to pay its upstream provider for the international bandwidth. As a result, there were some large-scale internet outages as bandwidth provider Tata cut off supply to Nepali service providers.
Broadly speaking, both companies have not been able to import and deploy new equipment without NTA’s approval. The lack of facilitation from the regulator hurt important telecom development works. As a result, both NT and Ncell are not able to carry out new network setups, upgrades, etc.
Currently, Nepal’s telco industry is going through a hard time. Both Ntc and Ncell have seen their revenues fall over the years. It has reached to a point where the industry has started discussing the launch of subscription model telecom service. However, these conflicts between the regulator and operators don’t reflect any positivity. But since the full text of the High Court decision has arrived, we should expect the controversy to thaw. And there is a ray of hope if telecom industry is revitalized with lots of positive development lately.
Also find: NTA to provide 5G license within a week
What is your opinion on this saga over the 2100 MHz band fee payment? Were Nepali authorities too harsh on payment obligations on telecom companies? Do leave your opinion in our comment section below.
