KATHMANDU: United Telecom Limited (UTL) is making a renewed push to preserve its basic telephone service licence as its 10-year term approaches expiry, but the company’s bid faces a central obstacle: more than Rs 30.8 billion in outstanding government dues.

UTL’s licence expires on September 4, 2026, and the company has already applied to the Nepal Telecommunications Authority (NTA) for renewal within the prescribed period. The regulator, however, has told the company that the renewal process cannot move forward unless it settles the fees and other liabilities required under the law.

The case has now moved beyond a routine licence-renewal process. UTL’s Nepali promoters have intensified their engagement with the NTA and government officials, seeking a way to restructure the company’s liabilities and keep its licence alive.

According to people familiar with the discussions, the promoters have proposed paying around Rs 10 billion upfront, followed by about Rs 3.4 billion as an initial instalment of the renewal fee. They are also seeking a facility to settle the remaining amount in instalments.

The proposal is far below UTL’s total outstanding liabilities. NTA spokesperson Min Prasad Aryal said the company’s dues have crossed Rs 30.8 billion, including licence renewal fees, royalties, spectrum-related charges and contributions to the Rural Telecommunications Development Fund (RTDF), along with penalties for delayed payment.

“Taking everything into account, the outstanding amount payable by UTL has exceeded Rs 30.8 billion,” Aryal said.

A licence with little activity

UTL has remained largely inactive for years. The company received its basic telephone service licence in 2016 but failed to establish itself as a meaningful competitor in Nepal’s mobile market.

Its internet service licence has already been cancelled by the NTA after prolonged inactivity and failure to pay renewal fees.

The company’s current attempt to retain its basic telephone licence therefore comes at a critical point for Nepal’s telecommunications sector, with the government considering measures to introduce another mobile operator and the regulator working on a framework for 5G services.

UTL’s promoters are presenting the renewal as an opportunity to revive the company, attract fresh investment and enter the next phase of Nepal’s telecom market with 5G services.

A UTL director confirmed that the company wants to clear its outstanding obligations and renew the licence.

“We have only asked for facilitation for licence renewal after we clear our outstanding dues,” the director said. “If the government creates a favourable environment, we are preparing to operate UTL by introducing 5G services.”

The promoters have also indicated that additional foreign investment could be brought into the company if the licence is renewed.

The question of a massive waiver

The most contentious part of the proposal concerns the scale of relief being sought.

People familiar with the discussions say the promoters want the government to consider reducing the total amount payable to roughly Rs 13 billion to Rs 13.8 billion, effectively seeking relief of around Rs 17 billion from the company’s accumulated liabilities, particularly interest and penalties.

The NTA board is examining whether there is a legal basis to provide such relief. Any broad waiver of government dues, however, could require a decision at the government level.

The regulator has also considered the possibility of allowing UTL to pay its renewal fees through instalments. Nepal Telecom and Ncell have previously received instalment facilities for licence renewal payments, and UTL is seeking similar treatment.

NTA sources say licence renewal fees alone account for roughly Rs 20 billion of UTL’s liabilities.

The NTA board discussed UTL’s renewal application last week and instructed the company to pay the required fees and proceed with the renewal process. The regulator also informed the Ministry of Communication and Information Technology about its decision on August 5.

A company that has survived repeated regulatory pressure

UTL’s licence has been under scrutiny for several years. The NTA board had previously considered cancelling the company’s basic telephone licence after its prolonged inactivity and mounting unpaid dues.

A detailed assessment ordered by the regulator later found that UTL’s outstanding liabilities had risen above Rs 30 billion.

The company’s ownership structure also gives the renewal issue a cross-border dimension. UTL is jointly owned by India’s Mahanagar Telephone Nigam Limited (MTNL) with 26.68 percent, Telecommunications Consultants India Limited (TCIL) with 26.66 percent, Tata Communications with 26.66 percent and Nepal Ventures Pvt. Ltd. with 20 percent.

Nepal Ventures is the local shareholder associated with UTL’s Nepali promoters.

Under the Telecommunications Act, a telecom licence may have a total validity of up to 25 years, although it can be issued for a maximum of 10 years at a time. UTL’s first 10-year term is therefore set to expire on September 4.

The immediate question is no longer simply whether UTL wants to continue operating. It is whether the government will allow a company with more than Rs 30.8 billion in accumulated liabilities to retain its licence on revised payment terms—and whether a fresh investment promise is sufficient justification for substantial relief on dues owed to the state.

With the expiry date approaching, the decision could set an important precedent for how Nepal handles long-outstanding telecom liabilities, licence renewals and the entry of new operators into an increasingly competitive market.