The revocation of Smart Telecom’s licence has sparked a dispute between the government and legal experts over the ownership of its towers and other assets. While the Telecommunications Act stipulates that assets of companies with over 50% foreign investment revert to the government, the 2022 regulations state that all assets of revoked companies should go to the Nepal Telecommunications Authority. Legal experts argue that these regulations contradict the Act, and without a court ruling, the issue cannot be resolved merely through public debate. Kathmandu, 3rd Bhadra.
Following allegations that banks auctioned off Smart Telecom’s towers and other properties mortgaged as collateral, Nepal Police’s Central Investigation Bureau initiated an investigation and the government filed a case. Amid this, questions have arisen about who owns the assets of telecom companies whose licences are revoked. The Nepal Telecommunications Authority decided to revoke Smart Telecom’s licence on 4th Baisakh 2080. Since 2022, disputes have arisen regarding ownership of physical infrastructure, towers, equipment, and other assets when a telecom company’s licence is cancelled.
Section 33 of the Telecommunications Act, 2053, specifies that when the licence period expires for a telecom company with over 50% foreign investment, the land, buildings, machinery, equipment, and structures become the property of the Government of Nepal. However, Rule 18 of the “Asset Management Regulations for Telecommunications Service Providers with Revoked Licences, 2022,” issued by the government, mandates that all assets, infrastructure, structures, and networks of such companies revert to the Nepal Telecommunications Authority.
Legal experts note that in cases of conflict between a primary Act enacted by Parliament and subordinate regulations issued by the government, the provisions of the Act prevail. The Smart Telecom case is not only a matter of legal interpretation but also raises serious practical and policy issues.
Advocate Baburam Aryal, who works in the technology and telecom sector, stated that the government has complicated the issue by enacting contradictory regulations. He said, “When there is a conflict between the Act and the regulations, the primary Act always takes precedence. Regulations are legally weaker documents.” Aryal sees the Smart Telecom dispute as the “worst example” of distortions in law and policy within the telecom sector that the government could create.
This matter is currently under judicial consideration, according to sources who requested anonymity. Legal procedures stipulate that even when a company’s licence is revoked, the management of its physical infrastructure and assets like towers must follow established legal procedures rather than be dictated solely by executive orders. There are warnings that disregarding this could negatively affect Nepal’s investment-friendly environment.
