Ncell

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Ncell (Pvt) Ltd
Private
Industry Telecommunications
Area served
Nepal
Products Cellular network, broadband
Increase NPR 91.195 billion (2016)[1]
Increase NPR 99.932 billion (2016)[1]
Total assets Increase NPR 500.324 billion (2016)[1]
Total equity Increase NPR 300.586 billion (2016)[1]
Number of employees
5299 (2016)[2]
Parent Axiata Group Berhad
Website www.ncell.axiata.com


Ncell (Nepali: एनसेल), is a privately owned mobile network operator in Nepal. Ncell was the first private company to operate public GSM services in Nepal, initially under Mero Mobile brand, re-branded to Ncell on 12 March 2010.[3] It broke the monopoly held by the then state-owned, now public telecommunication company Nepal Telecom. On 12 April 2016, Ncell has officially become a part of Axiata Group Berhad, a Malaysian telecommunications group[4][5] with its rebranding on 16 August 2016.[6]

Background[edit]

The company is owned in 80% by Axiata Group Berhad. Ncell is the largest ISP in Nepal with a subscriber base of more than 3 million users.[7] Ncell has 14 million mobile subscribers as of August 2016.[8]

Partnership[edit]

Ncell became a part of Axiata Group Berhad on 11 April 2016, when the Group bought 100% shares of Reynhold Holdings, which holds 80% shares of Ncell. On 21 December 2015 TeliaSonera accounced plans to sell its 60.4% ownership in Ncell to a Malaysian telecommunication conglomerate Axiata, with the deal expected to be completed in the first half of 2016.[9]

Technology[edit]

Ncell has new technologies and thoughts that attract many customers across Nepal which leave behind other telecommunications in competitive market. People across Nepal complain about the charges and taxes it takes. It organizes several IT related programmes, Sport-tournaments and sale smartphones being a carrier. It is very good at advertising. It has painted the roofs of houses in Manakamana (which can be seen from cable car and that place is also called as Ncell Gaun by local peoples). Recently, the company announced that it will be launching 4G technology in the near future however the company looks forward to imminently receiving the 4G/LTE spectrum from the Nepal Telecommunications Authority in order to serve the community better.[6]

Internet and Packages[edit]

Ncell provides different offers and services on its network. Currently Ncell is providing Facebook Zero from Feb 15, 2017 for 90 days.[10] Recently, Ncell is going to stop zero rated Wikipedia and twitter from March 25. Ncell provides packages services to the customer to use internet in low price and many people are using this offers of internet and global communication.

Tax evasion case[edit]

According to major newspaper headlines since the announcement in December 2015 that TeliaSonera was selling its stake in Ncell in the biggest and most complicated corporate deal, the entire divestment process had baffled the number crunchers, with questions lingering as to what happens with the Capital gains tax (CGT) of the Swedish-Finnish telecom operator.[11]

TeliaSonera on 2016 April 12 formally announced that the divestment was formally completed and that its stakes in Ncell had been officially acquired by Axiata, a Malaysian telecom giant.

Ncell under axiata the then wrote to Large Taxpayer’s Office (LTO), stating it is unaware of its share transfer to Malaysian company, and hence is not liable to CGT, in a clear indication that it will not pay the applicable tax to the government. Ncell was responding to a letter by LTO sent to Ncell last week, in which the telecom operator was asked to submit the details of the share divestment and pay the applicable CGT. A source at the Ministry of Finance say Ncell replied to LTO a couple of days ago. In a press release, Axiata had announced the acquisition [of Ncell], and the Ncell website included the trademark of Axiata.

In a record deal, Axiata had bought Reynolds Holding, the owner of Ncell, from TeliaSonera at an enterprise value of USD 1.03 billion. Reynolds Holding is the TeliaSonera’s wholly owned subsidiary, registered at Saint Kitts and Nevis, a tax haven. The Malaysian company had also acquired 19.6 percent stake of Visor Group of Kazakhstan to have 80 percent stake in Ncell. Though TeliaSonera formally announced on April 12 that the divestment had been formally completed, it had said nothing on CGT. The issue of CGT is being hotly debated since TeliaSonera announced in December last year that it would divest 60.4 percent of its stake in Ncell to Axiata.

On 2016 April 8, the Parliamentary Finance Committee had called a meeting to discuss the Ncell deal. However, the meeting was cancelled at the last hour. Sources said the meeting was cancelled following political pressure from the highest level. Interestingly, four days later, TeliaSonera announced that the divestment had been completed. The investment made in Nepal by TeliaSonera was through Norwary-based TeliaSonera Norway Nepal.

In a complex ownership structure, TeliaSonera Norway Nepal had 100 percent stake in Reynolds Holding which owns 80 percent stake in Ncell.

Even the government authorities were not sure whether the government should levy CGT on the acquisition of Ncell by Axiata, as it was off-shore transaction even though senior officials at the Ministry of Finance were in favour of levying CGT.

According to tax officials, if CGT was imposed, 25 percent of the deal’s profit could go to the state coffers. Government sources said attempts were being made to avoid CGT in the 80 percent share transfer as the deal was between two non-Nepali companies that was signed abroad.[12]

However, Neeraj Gobinda Shrestha, the local partner, has already paid Rs. 2.83 billion in CGT for the sale of 20 percent of the shares to Sunivera Capital Venture.

The issue of CGT was also discussed in the Parliamentary Development Committee. On January 26, the committee had sought response from the Inland Revenue Department, Department of Industry, Ministry of Information and Communication Technology, Office of the Company Registrar and the Nepal Telecom on various issues.

At the meeting, lawmakers had expressed suspicion that the price for the 80 percent foreign stake was maintained higher assuming that no tax would be levied on that transaction, and the price for the domestically held shares—on which the tax is applicable—was maintained lower to evade tax. The company was also charged of corrupting high government officials for the success of the evasion.

As of March 2017 many protests were being held in various places throughout country.

See also[edit]

References[edit]

External links[edit]