NTC’s income dipped slightly to Rs39 billion this year from Rs40 billion last year, largely due to a fall in income from international voice calls. The company has lost 28% of its earnings from international calls in just three years because of inroads by Internet-based messaging apps.
Nepal Telecom’s assistant spokesperson Shobhan Adhikari justifies the slowdown in income from international calls, arguing this is now the trend worldwide. “It is not just us,” he said.
But there are other trends that show NTC’s decline from being the country’s largest tax-paying company till a few years ago. Ncell is now paying more in taxes than NTC, with more than Rs14 billion in each of the last three fiscal years. NTC’s tax total went down to Rs9 billion, compared to Rs13 billion three years ago.
To make matters worse, NTC is currently rocked by a corruption case with its first female executive head sacked following an ugly legal tussle. The anti-corruption watchdog CIAA is investigating the company for initiating a process to award a multi-billion dollar 4G service network installation contract to a Chinese company, which reportedly quoted a much higher price than the estimate. There is also an argument that spending billions in expanding the 4G service would be a waste of resources because the world is moving towards 5G. The controversy has delayed NTC’s expansion plans for its 4G service beyond the Kathmandu Valley and Pokhara.
When Nepal Telecom launched 4G service in the valley in 2016, Ncell was not allowed to upgrade its service for failing to clear its capital gains tax. But Ncell secured a license to launch 4G service last year, and it has already expanded to 21 cities. NTC is lagging far behind.
A former top manager of Nepal Telecom says: “The State-owned company is not collapsing any time soon, but its downfall has definitely begun.”