Aug 07, Kathmandu - The government has intensified its initiatives to settle longstanding financial disputes with Internet Service Providers (ISPs), aiming to resolve complex issues related to telecom service fees, royalties, the Rural Telecommunications Development Fund (RTDF), and license renewals through legal and policy measures.

In a recent meeting, Communications and Information Technology Minister Dr. Bikram Timilsina emphasized that no service provider can bypass taxes and fees mandated by law. He clarified that while the government may review certain issues arising from legal ambiguities, neglecting statutory obligations for years is unacceptable.

Minister Timilsina stated, “This fiscal year is dedicated to reforming the telecom sector. We aim to address policy, administrative, and regulatory challenges to make the industry more transparent, competitive, and well-regulated.” He urged ISPs to submit written proposals on operational challenges, necessary legal amendments, and suggestions for sector improvements.

The Nepal Telecommunications Authority (NTA) reaffirmed its policy stance that licenses cannot be renewed unless outstanding debts are cleared. Minister Timsina underscored that ongoing operations without fulfilling legal responsibilities and license renewals is untenable.

With numerous ISPs operating in Nepal, effective regulation and quality service provision pose significant challenges. The government is open to exploring mergers and acquisitions among financially capable companies to enhance industry standards and consumer protection.

ISPs, citing financial pressures, have requested flexible repayment schedules for longstanding debts, especially concerning royalties and contributions to the RTDF. They highlighted that the suspension of license renewals due to unpaid dues has adversely affected service expansion, banking transactions, investments, and regular business operations.

Additionally, ISPs have called for a review of the basis for telecom service fee calculations, reconsideration of tax reassessments by the Large Taxpayers Office, and solutions for taxes levied on amounts not actually collected from customers.

Currently, most ISPs have not fully paid the mandated 4% royalty on total revenue and 2% contribution to the RTDF, aside from taxes paid to the Inland Revenue Department. The Office of the Auditor General has also pointed out significant unpaid amounts in its annual reports and has consistently advised the government to enforce collection of these regulatory fees.

The government appears to be pursuing a dual approach—strict enforcement of legal obligations while seeking to address practical and policy-related issues faced by the industry. Future dialogues among the Ministry, NTA, and ISPs are expected to resolve the longstanding debt disputes, license renewal uncertainties, and tax ambiguities.