Ncell’s Shareholding Dispute: Proposal Signals Potential Shift Toward Greater Nepali Ownership

Ncell Axiata Limited has formally approached the Nepalese government with a comprehensive proposal to resolve its longstanding shareholding dispute. The move comes amid legal and regulatory challenges that have delayed recognition of its share transactions, raising concerns over investment certainty and foreign ownership regulations in Nepal’s telecommunications sector.

The dispute began when Axiata Investment UK sold its entire stake in Renold Holdings, which held 80 percent of Ncell, to Spectralight UK Limited, owned by a non-Nepali citizen. Questions over whether prior government approval was required for the transaction triggered regulatory scrutiny and led to a Supreme Court directive instructing authorities to follow legal procedures.

Ncell’s proposal requests a three-pronged resolution: repeal the 10th amendment to the telecom regulations that restricts shareholding changes, review the Council of Ministers’ 2080 Falgun 6 decision concerning license renewal conditions, and ensure that Ncell maintains over 50 percent Nepali ownership. The company has suggested increasing local investor participation through a public share issuance (IPO), which could redefine ownership structures and enhance domestic control.

Analysts interpret this approach as a strategic attempt to align legal compliance, investor confidence, and operational continuity. By offering a clear path to greater Nepali ownership while retaining operational flexibility, Ncell aims to mitigate regulatory risk and avoid disruptions to its mobile services, including future 5G and 6G investments.

The financial and operational stakes are significant. Ncell reports that it has contributed approximately NPR 375 billion in taxes since its establishment, directly or indirectly employed over 100,000 people, and currently serves more than 14 million customers. Disruptions in license or ownership recognition could have broader implications for Nepal’s digital economy, affecting mobile banking, e-commerce, fintech, and e-governance initiatives.

The proposal also reflects the company’s effort to reconcile regulatory compliance with international investment protection laws. Ncell emphasizes that restrictions on share transfers imposed through regulatory amendments, rather than statutory provisions, could undermine investor rights and set concerning precedents for foreign investment in Nepal.

The government’s forthcoming decision is expected to be pivotal. It must balance the strategic importance of the telecommunications sector, protection of investor rights, and legal and constitutional provisions while ensuring that Ncell continues to operate smoothly. Observers note that a favorable resolution could not only stabilize the company’s operations but also send a strong signal to international investors about Nepal’s commitment to transparent and predictable investment regulations.

In essence, Ncell’s latest proposal may pave the way for a significant restructuring of ownership while maintaining service continuity and fostering greater Nepali participation, highlighting the delicate intersection of regulation, foreign investment, and national economic interests.