Indo-Nepal telecom joint venture dragged into lawsuit

Friday, 13 February 2004, 20:30 IST
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KATHMANDU: Within months of its launch, the India-Nepal joint venture United Telecom Ltd has been dragged into a lawsuit and accused of defaulting on tax payments amounting to over Rs 50 million. The joint venture is a partnership between three Indian firms - Mahanagar Telephone Nigam Ltd, Videsh Sanchar Nigam Ltd and Telecommunications Consultants India Ltd -- and Nepal Venture Private Ltd. Kamal Prasad Khanal, president of the NGO Credit Consumers and Public Service Association, filed a petition in the Supreme Court saying that the government should have formulated appropriate laws before allowing United Telecom to operate. The apex court has asked the Nepal government, the Prime Minister's Office and the ministry of information and communications to furnish an explanation. A media report on Thursday said that Khanal has also accused United Telecom of "defaulting on tax payments amounting to more than Rs 50 million". Four years ago, the government decided to allow a second operator to provide basic telephone services in the country in view of sole connection provider Nepal Telecommunications Authority's inability to meet the rocketing demand for new lines. In October 2002, United Telecom was licensed by the government to launch basic telephone services after it outbid global competitors. A United Telecom spokesman told IANS on Thursday that so far the company had not received any documents from either the court or the government. "We have to study the documents to see if we are a party to the suit at all," he said. "Prima facie, it seems to be a suit against policy matters." Khanal's suit seems against an operator providing limited mobility service, which would mean a subscriber can use the same phone if he moves from one locality to another in the same city. "So far, United Telecom is only providing basic telephone services. There's no limited mobility service. We paid the government a fee of Rs 100 million for the licence and any allegations about our not paying tax is baseless," he said. United Telecom's present services, the spokesman said, would not be affected. The firm launched its services in Kathmandu last year in the presence of IT and Disinvestment Minister Arun Shourie and Nepalese Information and Communications Minister Kamal Thapa. Thapa said it marked a "new phase in Indo-Nepal relations" and hoped it would help meet the "huge scarcity" of telephone lines with over 200,000 applications pending". This is the second joint venture to feature in a legal suit in Nepal this year. Recently, the Manipal Group, the largest Indian investor in Nepal, was named in a public interest petition. The petitioner alleged that the group, which runs a medical college in Pokhara, had not been able to honour its commitment to start an engineering college in Mahottari district.
Source: IANS
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