KYC #08
Ncell: Sold twice, taxed twice, licensed to 2029. Who owns Ncell, and what is it worth if the licence ends?
Ncell has no share price, no published accounts and an owner the regulator has not recognised. We followed the ownership chain, the tax judgments, the 2023 sale, the licence law and the 2026 events, and separated what courts, filings and the company have established from what a government committee, the press and the parties allege.
The short version
- Ncell Axiata Limited runs Nepal’s only private mobile network. It has about 1.41 crore voice SIMs, 46.5% of the market, against Nepal Telecom’s 53.5% (NTA data for mid-2026, as reported). Revenue was Rs 3,254 crore in the year to mid-July 2025, down from nearly Rs 6,000 crore in the year to mid-July 2018.1,55,56,3
- Its licence has run since 2004 and ends on 1 September 2029. The Telecommunications Act, as the government committee and Axiata’s own accounts read it, passes the assets of a licensee with more than 50% foreign investment to the state when the 25-year licence ends.1,3,44
- Ncell has already paid about Rs 4,700 crore of capital gains tax on the 2016 sale of its parent by TeliaSonera to Axiata (court finding, 2019). A further assessment of Rs 5,790 crore on the same transaction was issued in January 2021 and is under a Supreme Court stay.1,4,24,28
- On 1 Dec 2023 Axiata sold its 80% for a fixed USD 5 crore (about Rs 666 crore) plus a share of dividends to 2029, against the USD 136.5 crore it paid in 2016. Nepal’s regulator has not recognised the sale; the Supreme Court in Dec 2024 dismissed a petition to cancel it and left the decision to the regulator.4,6,46,47
- A government committee called the 2023 agreement not at arm’s length and put the company’s value at Rs 14,800 to 18,000 crore. Our own valuation, which weighs the 2029 licence outcome, is Rs 740 to 4,320 crore before any tax claim, about Rs 1,700 crore at the centre. Both are labelled as what they are: the committee’s estimate and ours.3
- Separately, a charge sheet filed on 12 Aug 2026 names 22 defendants over the bank auction of Smart Telecom’s assets, which Ncell won with a bid of Rs 460 crore. Prosecutors seek Rs 9,612 crore. These are allegations; the court has decided nothing, and the case is separate from the Axiata sale.37,38
The question: When you look at Ncell, which of its owners, which of its tax bills and which of its licence dates should you actually believe?
The numbers
- Revenue, year to mid-July 2025: Rs 3,254.5 crore. Audited operating income, down 4.5% on the year before and 45% below the year to mid-July 2018 (nearly Rs 6,000 crore). The latest quarter, to mid-October 2025, was Rs 818.9 crore (provisional).
- Operating margin (rating agency basis): 50%. Operating profit before depreciation, interest and tax over operating income, year to mid-July 2025. It was 55% in 2022. Axiata and the committee quote higher margins on their own definitions.
- Capital gains tax paid on the 2016 sale: About Rs 4,700 crore. Including fines and penalties, paid by Ncell after the 2019 Supreme Court judgment that it and its parent were liable. Axiata says LTO confirmed in April 2020 that nothing more was due; a reassessment followed in January 2021.
- Further assessment, January 2021: Rs 5,790 crore. Section 57 assessment on the same transaction (Axiata’s figure, including interest to 13 Jan 2021). Collection is stayed by a Supreme Court interim order of Feb 2021; no final ruling was found. It is not a liability until a court says so.
- Fixed price for 80% in December 2023: Rs 666 crore. USD 5 crore (USD 0.5 crore within six months, the rest after 48 months), plus a share of Ncell’s dividends to 2029 and a tax indemnity. Axiata paid USD 136.5 crore for the same stake in 2016.
- Our weighted value of the company, before tax claims: Rs 1,704 crore. Equity value in our valuation, weighing three licence outcomes. The range across operating cases is Rs 744 to 4,319 crore. Disputed tax claims are shown beside it, not deducted.
01. Sold twice, taxed twice, licensed to 2029
On 1 December 2023 Axiata, a Malaysian telecom group, agreed to sell its 80% of Ncell for a fixed USD 5 crore (about Rs 666 crore). Seven years earlier it had paid USD 136.5 crore for the same stake. The fixed price was 3.7% of what Axiata paid (our calculation). That is not a like-for-like comparison: it leaves out a share of dividends to 2029 and a tax indemnity from the buyer, and it comes seven years and a falling business later.4
Ncell is Nepal’s only private mobile operator. It earned Rs 3,254 crore of revenue in the year to mid-July 2025, down 45% from its 2018 peak, and its rating agency puts its operating margin at 50%.1,3 It has paid about Rs 4,700 crore of capital gains tax on the 2016 sale of its own parent, after a court found in 2019 that it and the buyer, not the seller, were liable.4,1,24
A separate matter, and not a finding: on 12 August 2026 prosecutors filed a charge sheet against 22 people over the bank auction of Smart Telecom’s assets, which Ncell won with a bid of Rs 460 crore. They seek recovery of Rs 9,612 crore. It is an allegation before the Kathmandu District Court, and it is a different matter from the Axiata sale.37
Two sales, two tax questions. The 2016 sale produced a tax bill that the Supreme Court said Ncell must pay. In January 2021 the tax office assessed Rs 5,790 crore more on the same sale (Axiata’s figure); a Supreme Court order stops collection and no final ruling has been found. The 2023 sale has not been recognised by the regulator.4,28,46
The licence that lets Ncell operate ends on 1 September 2029. The Telecommunications Act, as the government’s committee and Axiata’s own accounts read it, passes the assets of a licensee with more than 50% foreign investment to the state at that point. The regulator told Ncell this autumn to prepare a handover plan.1,3,44
Almost nothing here rests on Ncell’s own published accounts, because we found none. The audited figures come second-hand from a rating agency. The ownership story comes from a government committee’s report, press reports and court orders, each of which we label.1,3
This is a Know Your Company file, not a valuation. It says who owns Ncell, what it earns, what it has been taxed, what has been alleged and what is not known. Our separate valuation asks what the business is worth if the licence ends, continues or changes hands.
When you look at Ncell, which of its owners, which of its tax bills and which of its licence dates should you actually believe?
02. Ncell on one page
The facts a reader should be able to repeat, with the basis for each.
| Item | Fact | Basis |
|---|
| What it is | Nepal’s only private mobile operator, a GSM licensee since 2004, in service since September 2005 | Regulator and ICRA |
| Legal form | Ncell Axiata Limited, a public limited company since 3 Aug 2020 that is not listed; legal name unchanged since 2016 | ICRA |
| Shareholders on paper | Reynolds Holdings 79.99%; Sunivera Capital Venture 19.99%; seven individuals 0.0011% | Committee, ICRA |
| Who the regulator recognises | Not decided: the 2023 sale of Reynolds to Spectrlite UK has not been recognised | Court, press, ICRA |
| Revenue | Rs 3,254.5 crore, year to mid-July 2025 (audited, as ICRA reports it) | ICRA |
| Margin | 50% operating profit before depreciation, interest and tax over revenue (ICRA basis) | ICRA |
| Debt | About 0.7 times operating profit; 0.9 at mid-October 2025 | ICRA |
| Competitor | Nepal Telecom (state-controlled): 53.5% of voice SIMs, 46.5% Ncell (mid-2026) | Press (NTA data) |
| Licence | 25-year initial term to 1 Sep 2029; renewed for five years in Sep 2024 for Rs 2,000 crore | ICRA, press |
| Disputed tax | Rs 5,790 crore assessed in January 2021, stayed; contingent liabilities about Rs 8,600 crore | Axiata, ICRA |
| Criminal case | Charge sheet of 12 Aug 2026 against 22 defendants over Ncell’s Rs 460 crore purchase of Smart Telecom’s assets; Rs 9,612 crore sought; allegations only | Press |
| Published accounts | None found: no balance sheet, cash flow or notes | Our search |
Information to 23 Oct 2026. “Basis” says who we rely on. Our search for company-published statements covered the company’s site, the regulator, ICRA and Axiata. 1,3,55,41,4
A private operator in a market with one state competitor. How did it get there?
03. A private licence in a state-run market
Ncell began as Spice Nepal Private Limited. ICRA Nepal dates its incorporation to 2001; the government committee puts its registration in BS 2058 with 60% foreign and 40% Nepali capital, an authorised capital of Rs 50 crore and an initial payment of only Rs 5 lakh on its shares.1,3
The regulator’s letter of intent is dated BS 2056/07/15 (about October 1999). The GSM-900 licence under the Telecommunications Act 2053 runs from BS 2061/05/16 (1 September 2004). Commercial service began in September 2005 (one outlet gives the 17th) under the brand “Mero Mobile”, the first private GSM service in the country; the licence (2004), the launch (2005) and the rename to Ncell (2010) are three separate events; state-owned Nepal Telecom was the only competitor.3,1,39
In September 2008 TeliaSonera agreed to buy a majority of the holding company that owned 80% of Spice Nepal, in a purchase whose headline was USD 48.8 crore for both operators it acquired. In March 2010 the brand became Ncell and the company Ncell Private Limited.33,1
The sources we could open say little about how the network was built. The company says it covers more than 95% of the population, runs the widest 4G network in the country and has spent more than Rs 13,000 crore on capital projects in 21 years.50,5,52 We found no independent account of the build, its delays or its costs, and the company’s statements are the company’s.
Why this matters. The first fact about Ncell is not a tax bill. It is that a private company built a national mobile network on a 25-year licence, and that the licence is the asset. Everything later in this file is about who holds that licence and on what terms.
How it earns money is not complicated. Customers pay for voice and data. The company pays the state a 4% royalty and 2% for the rural telecom fund on prior-year revenue, frequency fees, licence fees, income tax and collects VAT.53,52 The committee also records technical and management service fees paid in US dollars to entities linked to the foreign owner, with the central bank providing foreign exchange for them; the amounts are not legible enough in the scan to use.3 Data was 33% of revenue in calendar 2022, up from 24% in 2020, the latest split Axiata reported.54
A business that sold voice and data on a licence. Who owned it, and who owns it now?
04. Fourteen transfers, two sales and a register the regulator has not updated
The committee counts 14 share or ownership transfers since 2001, most of them offshore and many without records submitted to the Nepali authorities.15,3 The chart shows who stands where on paper today, with the buyer of 2023 dashed because the regulator has not recognised it. Click any box.
- Reynolds Holdings (St Kitts and Nevis) (79.99%). Holds about 80% of Ncell (79.99% in the committee’s table of 2020). Axiata Investments (UK) owned Reynolds from 11 Apr 2016. On 1 Dec 2023 Axiata agreed to sell it to Spectrlite UK. The regulator has not recognised the transfer, and ICRA’s February 2026 report still shows the legal name as unchanged.
- Spectrlite UK Limited (Buyer of 80%). Registered in September 2023 with share capital of USD 1, raised to USD 1 lakh on 30 Nov 2023 (the committee’s reading). Its sole shareholder is a Singapore-based person of Nepali origin who, according to ICRA, is also effectively the owner of the local partner. The seller keeps a share of dividends to 2029 and has a pledge over shares in a Cambodian company as security.
- Sunivera Capital Venture (Nepal) (19.99%). The local 20% has had several holders since 2012. Sunivera bought it on BS 2072/12/17 (late March 2016). The committee asks who funded the purchase and whether earlier sellers were resident or non-resident Nepalis; these are its questions, not findings. ICRA describes Sunivera as effectively owned by the buyer’s owner.
- Seven individuals (0.0011%). On 3 Aug 2020 Ncell issued 11 shares to seven more individuals so that it could become a public limited company. The committee calls the process not natural; the government says the police are investigating these shares.
- Nepal Telecommunications Authority (Not an owner). Under the Telecommunications Regulations 2054 a transfer above 5% of paid-up capital needs its prior approval. It has not recognised the 2023 transfer. The Supreme Court said in Dec 2024 that it may approve, penalise or take other action.
- Mobile network. Voice and data on the licence granted from BS 2061/05/16 (1 Sep 2004). Ncell has been in service since September 2005 and says its 4G network is the widest in the country. It holds about 51% of GSM revenue and 46.5% of voice SIMs.
- Revenue. Audited operating income, down from nearly Rs 6,000 crore in the year to mid-July 2018. Data was 33% of revenue in calendar 2022, the latest split we found.
- Capital spending. The company’s own figure. ICRA notes large capital-spending payables owed to suppliers; in Feb 2026 it raised the rated long-term loan limits from Rs 1,060 crore to Rs 2,000 crore.
- Smart Telecom assets (disputed). Ncell’s bid of Rs 460 crore was accepted at a bank auction of assets pledged by Smart Telecom, a former operator whose licence was revoked in April 2023. Prosecutors say the assets were already under state control and have charged 22 people, among them Ncell’s chairman and directors; the case is pending and these are allegations.
- Subsidiaries. We found no subsidiary, associate or related company in any source. Ncell publishes no full financial statements, so we cannot say whether it has any.
- Taxes and fees to the state. On the committee’s figures, tax of about Rs 21,340 crore and non-tax payments of about Rs 8,850 crore to December 2023, about Rs 30,200 crore in all; the tax includes VAT and other amounts collected from customers. The company says it paid Rs 1,724 crore in the year to mid-July 2026.
- Dividends. Rs 9,351 crore declared from the year to mid-July 2012 to 2023, of which Rs 6,695 crore went abroad (the committee). Payout fell from about 90% of profit to about 50% for the years to mid-July 2024 and 2025. Rs 748 crore of declared dividends were awaiting central bank approval in mid-October 2025.
- Capital gains tax on the 2016 sale. About Rs 4,700 crore paid including fines and penalties between 2016 and 2020 (Axiata and ICRA agree). A further Rs 5,790 crore assessed in 2021 is under a Supreme Court stay.
- Smart Telecom auction. Rs 460 crore paid for the assets in October 2025. Prosecutors seek recovery of Rs 9,612 crore in the case over the auction; that is an allegation and not a court order.
- Licence renewal fee. Rs 2,000 crore for the renewal of Sep 2024, payable in instalments with 10% interest on the balance. Reported payments: Rs 500 crore at renewal, Rs 200 crore in July 2025, Rs 329 crore and Rs 496 crore (instalment plus interest, Aug 2026). We do not add them; outlets differ on dates and schedule.
| Date | What changed | Stake | Price or consideration | Basis |
|---|
| 2001 (BS 2058) | Spice Nepal registered with 60% foreign and 40% Nepali capital; several transfers follow in a low-resolution table we could not read reliably | 60/40 | Not found | Committee |
| Sep 2008 | TeliaSonera agrees to buy 51% of the holding company that owns 80% of Spice Nepal from Visor | 80% (via holding) | USD 48.8 crore for both operators | Press |
| 2012 | Local 20% changes hands twice within days; the committee questions whether the buyers were resident Nepalis | 20% | Not found | Committee |
| 21 Dec 2015 / 11 Apr 2016 | Axiata Investments (UK) buys Reynolds Holdings: Telia’s 60.4% and Visor’s 19.6% | 80% | USD 136.5 crore (Axiata), about USD 170 crore (filing quoted by the committee); Telia USD 103 crore for 60.4% | Axiata, Telia, committee |
| Late Mar 2016 | Sunivera Capital Venture buys the local 20% | 20% | Not established; committee questions the funding | Committee |
| 3 Aug 2020 | 11 shares to seven individuals; Ncell becomes Ncell Axiata Limited, public | 0.0011% | Face value | Committee, ICRA |
| 1 Dec 2023 | Axiata agrees to sell Reynolds to Spectrlite UK | 80% | USD 5 crore fixed, plus a share of dividends to 2029 | Axiata |
| 2024 to 2026 | Regulator does not recognise the transfer; Supreme Court leaves the decision to it | n/a | n/a | Press, ICRA |
Fourteen transfers are counted by the committee since 2001; early rows are from a low-resolution table we read page by page and are shown only as far as they were legible. Beneficial ownership of the local 20% is not established by any source; ICRA describes it as effectively owned by the buyer’s owner. 3,33,32,4,1
TeliaSonera, 2008 to 2016. TeliaSonera’s stake in the holding company passed through a Norwegian subsidiary. The Himalayan Times reports that at the time of the sale that subsidiary held 75.45% of Reynolds Holdings and a Visor company 24.55%.23
Axiata, 2015 and 2016. On 21 December 2015 Axiata Investments (UK) agreed to buy Reynolds Holdings, which holds 80% of Ncell. TeliaSonera said it was reducing its presence in seven Eurasian markets to focus on the Nordics and Baltics. Its 60.4% was priced at an enterprise value of USD 103 crore, 5.0 times EBITDA on cash- and debt-free terms; it also received about USD 4.8 crore from a Singapore company to dissolve its economic interest in the local 20%.32,3 Axiata puts its total price at USD 136.5 crore; an Axiata filing the committee quotes says RM680 crore (about USD 170 crore); the committee converts Telia’s own figures to about USD 159 crore. Sources differ, and we do not choose.4,3
The local 20%. The Nepali partner’s 20% changed hands twice within days in March 2012 and was sold to Sunivera Capital Venture in March 2016. The committee asks whether the 2012 buyers were resident Nepalis and who funded the 2016 purchase. These are questions, not findings. Beneficial ownership of the local 20% is not established by any source; ICRA says the buyer’s owner effectively owns it.3,1
Public limited company, 3 August 2020. Ncell issued 11 shares to seven more individuals so that it could convert to a public company. The committee calls the process not natural; the government’s 100-day document says the police are investigating these shares.3,16
Spectrlite UK, 2023. On 1 December 2023 Axiata agreed to sell Reynolds Holding to Spectrlite UK Limited, registered in the UK in September 2023, whose sole shareholder is a Singapore-based person of Nepali origin. Axiata’s stated reasons were unfair taxation, regulatory uncertainty and the 2029 expiry. One outlet reports that the buyer applied to the regulator for approval in March 2024 and that the application is undecided. Chapter 8 covers the terms.4,6,39
Where we could not establish an owner, we say so. We do not know how the buyer funded the purchase, who ultimately benefits from the local 20% beyond what ICRA states, or who sits on Ncell’s board; ICRA mentions experienced directors without naming them.1
Who are the people involved, and what is documented about them?
05. Institutions and roles, not personalities
Private individuals are described by role. Public bodies and officials are named in their official capacities. Nothing here infers wrongdoing from association or family relationships; those who are named in allegations are presumed innocent.
- Nepal Telecommunications Authority (Regulator and licensor, with the power to approve, penalise or take other action on the 2023 transfer). Issued and renewed the licence (2004, 2024). Asked Ncell for details of the 2023 sale in December 2023, has not recognised it, and in 2026 told Ncell to submit a handover plan for its assets and liabilities. The licence was renewed on conditions that forbid a change in share structure; the transfer has been in limbo for almost three years. The Supreme Court has put the decision in its hands. What it decides on the transfer will also signal what it will do in 2029.
- The buyer’s owner (Sole shareholder of Spectrlite UK; per ICRA, effectively also the owner of the 20% Nepali partner). Agreed on 1 Dec 2023 to buy Axiata’s 80% for USD 5 crore fixed plus a share of dividends. The committee notes that this person told it the company’s enterprise value was about USD 40 to 45 crore. The government committee questions the buyer’s technical, financial and managerial capacity and the source of funds. Those are the committee’s concerns; the buyer is presumed innocent and Ncell says capacity was verified when the licence was renewed. A charge sheet of Aug 2026 in the Smart Telecom case reportedly names Ncell’s chairman among 22 defendants; that too is an allegation. ICRA reads the 80/20 structure as effectively one owner. The committee treats the common ownership as a concern about cross-holding; no court has made a finding.
- Axiata Group Berhad (Malaysian telecom group; indirect owner of 80% from 11 Apr 2016 to 1 Dec 2023). Paid USD 136.5 crore (Axiata) in 2016, fought the tax in court and at ICSID, and sold for USD 5 crore fixed in 2023, citing unfair taxation, regulatory uncertainty and the 2029 licence expiry. It wrote off tax receivables and impaired its Nepal assets in 2023. We found no mention of Ncell or Nepal in its 2025 annual report. The committee argues Axiata earned a higher post-tax margin in Nepal than in Indonesia, Bangladesh or Sri Lanka, so its stated reasons for leaving are “not based on facts”. Axiata disputes the framing; we label this the committee’s view.
- TeliaSonera (Telia Company) (Swedish telecom group; indirect owner of 60.4% from 2008 to 11 Apr 2016). Sold its stake at an enterprise value of USD 103 crore, 5.0 times EBITDA, and received about USD 4.8 crore to dissolve its economic interest in the local 20%. Telia said all its tax requirements were met. The Supreme Court held in 2019 that the buyer and Ncell, not the seller, owe the tax. The committee notes Telia held an economic interest in the Nepali 20% too, which means the 2016 ownership was less simple than the register showed.
- The government committee (Study and investigation committee: a convener who is a former Auditor General and four members; reported 29 Jan 2024). Examined 14 share transfers since 2001, the 2016 and 2023 transactions, profits, dividends and tax, and made ten recommendations. The cabinet decided on 18 Feb 2024 not to accept the 2023 transaction as it stands. The report was published on 12 Aug 2026 and restrained two days later. It is an official report, not a court judgment. We attribute each finding to it and label its valuation as its own.
- The Supreme Court of Nepal (Final court on the tax judgment of 2019, the stay of 2021, the 2024 dismissal and the 2026 interim order). Held in 2019 that section 57(1) makes Ncell and its owner liable; stayed the 2021 assessment; dismissed a petition to cancel the 2023 sale in 2024; restrained publication of the report in 2026. Four rulings in seven years, none of which settles who owns Ncell or whether the 2021 assessment stands. The court has pushed each question back to an administrative body. The pending writ on the 2021 assessment is the largest open item.
- Large Taxpayers’ Office (Tax authority that assessed the 2016 and 2021 amounts). Concluded in June 2017 that Rs 6,071 crore was due, assessed Rs 6,263 crore on 16 Apr 2019 and reassessed on the same sale in January 2021. Ncell paid about Rs 4,700 crore. The 2021 reassessment, which Axiata says came after a confirmation of April 2020 that nothing was due, is stayed. Two assessments of one transaction, the second coming after the April 2020 confirmation Axiata describes, are why the tax figures cannot be added.
- Ncell’s management (Chief executive since 1 Nov 2025; the previous acting chief executive became chief financial officer). Writes to the government for resolution (7 Jan and July 2026), offers an IPO and 50% Nepali ownership, and has said 5G investment takes up to eight years to recover. Ncell has contested the publication of the report in court and continues to pay the renewal fee. Management’s position is that the licence should be extended; the regulator’s position is to prepare for handover. Both are on the record.
Reading the list, the institutions matter more than any person. A regulator that must approve transfers, a tax office that assessed twice, a court that kept sending questions back, a committee whose report is itself restrained, and two owners who never appear in Ncell’s accounts.
What does the business earn, and against whom does it compete?
06. About half the market, with revenue down by almost half
Ncell competes with one operator, state-controlled Nepal Telecom. Both sell mobile voice and data; ICRA calls Nepal Telecom Ncell’s only competitor.1,2 On the regulator’s subscriber data as reported, Ncell had 1.41 crore voice SIMs in Jestha 2083 (mid-2026), 46.5% of the total.55
| Ncell | Nepal Telecom | Basis |
|---|
| Voice SIMs, mid-2026 | 1.41 crore (46.5%) | 1.62 crore (53.5%) | NTA data as reported |
| Share of GSM revenue | About 51% (year to mid-July 2025) | About 49% | ICRA |
| Share of revenue, voice and data | About 48% (year to mid-July 2025) | About 52% (the remainder; our calculation) | ICRA |
| Operating margin | 50% (ICRA basis) | 45% (our calculation on the interim statement, “core” basis) | ICRA; interim statement |
| Ownership | Private, 80% foreign on paper | State-controlled, listed | ICRA; exchange |
| Licence horizon | Initial term ends 1 Sep 2029 | No expiry stated in its statement | ICRA |
| Fee treatment | Renewal fee Rs 2,000 crore with 10% interest | Ncell says Nepal Telecom bears no equivalent charge | Ncell |
Voice SIM counts are 14,109,263 and 16,209,110 for Jestha 2083 as extracted; the 46.5% and 53.5% shares are the press report’s. The regulator’s page could not be opened from our network. “Core” margin removes other income and finance income from Nepal Telecom’s reported EBITDA, our calculation. 55,1,10,48
Ncell’s share of GSM revenue fell from about 64% in the year to mid-July 2019 to about 51% in 2025, and ICRA describes a long decline in revenue per user. ICRA also notes that Ncell’s revenue per user is higher than the state competitor’s, and cites high entry barriers and a saturated user base.1,2
Nepal Telecom’s interim statement for the year to mid-July 2026 gives revenue of Rs 3,496 crore and a profit of Rs 881 crore. After removing other income and finance income, we get an operating margin of 45%, against Ncell’s 50% on ICRA’s basis. The definitions are not identical.10
What we could not compare: network quality, pricing, customer retention, rural against urban coverage, and enterprise and digital services. We found no independent data on any of them. Ncell’s own statements are the only source for coverage and for the widest 4G network, and we mark them as the company’s claims.50,6
Our view: Ncell’s advantages that could persist are its 50% margin and its position as the only private network. Its vulnerabilities are falling revenue, a licence that ends in three years and a financing and capital-spending cycle (5G, towers, spectrum) that needs a licence horizon it does not have.
Revenue is falling. What else has changed?
07. From Rs 5,969 crore to Rs 3,254 crore, with a tax shock in the middle
Ncell publishes no full financial statements. What we have is a patchwork: ICRA’s audited key indicators for the years to mid-July 2022 to 2025, the committee’s text for earlier years and a press report of ICRA’s 2022 rating. The sources use different definitions, and we do not mix them.1,3,56
Revenue (operating income), years to mid-July, Rs crore
- Jul 18: Rs 5,969.00 crore
- Jul 21: Rs 4,042.40 crore
- Jul 22: Rs 3,972.50 crore
- Jul 23: Rs 3,744.20 crore
- Jul 24: Rs 3,406.80 crore
- Jul 25: Rs 3,254.50 crore
The year to mid-July 2018 is the committee’s text (about Rs 5,969 crore); 2021 is ICRA’s figure as a press report gives it; 2022 to 2025 are audited, as ICRA reports them from company data. 2019 and 2020 were not found. Axis starts at zero. The committee’s own figure for 2023 (about Rs 3,688 crore) is on a different basis and is not mixed in.
Operating margin on the rating agency’s basis, %
- Jul 22: Rs 55.00 crore
- Jul 23: Rs 53.00 crore
- Jul 24: Rs 54.00 crore
- Jul 25: Rs 50.00 crore
Operating profit before depreciation, interest and tax over operating income. Axiata and the committee quote higher margins (about 57% to 58%) on their own definitions; we do not mix them. The first quarter to mid-October 2025 was 49% (provisional).
Ncell’s share of GSM revenue, %
- Jul 19: Rs 64.00 crore
- Jul 20: Rs 61.00 crore
- Jul 21: Rs 56.00 crore
- Jul 23: Rs 53.00 crore
- Jul 25: Rs 51.00 crore
ICRA’s approximate figures; the years to mid-July 2022 and 2024 were not stated on a comparable basis. The competitor is state-controlled Nepal Telecom. Share of voice SIMs in mid-2026 was 46.5% (NTA data as reported).
Share of profit paid as dividends, %
- to Jul 22: Rs 90.00 crore
- Jul 23: Rs 70.00 crore
- Jul 24: Rs 50.00 crore
- Jul 25: Rs 50.00 crore
ICRA’s approximate payout: about 90% to the year to mid-July 2022, about 70% of the profit for 2023 (paid in 2024) and about 50% for 2024 and 2025. Profit itself is not published after 2023.
Total debt over operating profit (OPBDITA), times
- Jul 22: Rs 1.00 crore
- Jul 23: Rs 0.80 crore
- Jul 24: Rs 0.70 crore
- Jul 25: Rs 0.70 crore
Bank debt and licence-fee instalments against operating profit on ICRA’s definition. The ratio was 0.9 at mid-October 2025 after new capital-spending borrowing. Interest cover was 7.7 times in the year to mid-July 2025 and the current ratio 0.74 at mid-October 2025.
| Rs crore | Jul 2016 | Jul 2018 | Jul 2021 | Jul 2022 | Jul 2023 | Jul 2024 | Jul 2025 |
|---|
| Revenue | 5,700 (about) | 5,969 | 4,042 | 3,973 | 3,744 | 3,407 | 3,255 |
| Operating margin, ICRA basis, % | n/a | n/a | n/a | 55 | 53 | 54 | 50 |
| EBITDA, committee basis | 3,133 (low confidence) | 3,704 | n/a | n/a | 2,145 | n/a | n/a |
| Net profit | 2,081 | n/a | n/a | n/a | 425 | n/a | n/a |
| Total debt over operating profit, times | no borrowings | n/a | n/a | 1.0 | 0.8 | 0.7 | 0.7 |
| Interest cover, times | n/a | n/a | n/a | 9.0 | 8.1 | 11.3 | 7.7 |
| Debt service cover, times | n/a | n/a | n/a | 3.7 | 3.2 | 3.5 | 2.8 |
| Current ratio, times | n/a | n/a | n/a | 0.68 | 0.65 | 0.86 | n/a |
| Dividend payout, % of profit | n/a | n/a | n/a | about 90 | about 70 | about 50 | about 50 |
Three sources on three bases, so read across with care: revenue and ratios for 2022 to 2025 are ICRA’s, from company data and audited; 2018 and 2023 EBITDA and 2016 and 2023 profit are the committee’s text, from a scan we read page by page (medium confidence; the 2016 EBITDA digits are low confidence); 2021 revenue is a press report of ICRA’s earlier report. The year to mid-July 2019 loss of Rs 3,152 crore came after Rs 4,535 crore of capital gains tax was expensed (committee). Ncell’s balance sheet, cash flow, capital spending, depreciation and tax paid by year are not published. n/a means not found. 1,3,56
The three most important changes, and what we can and cannot say about their causes:
1. Revenue fell by 45%. From about Rs 5,969 crore in the year to mid-July 2018 to Rs 3,254.5 crore in 2025. Axiata reports a 22.6% fall in calendar 2020 which it attributes to lockdown and spectrum limits; ICRA describes a long decline in revenue per user, market share and industry revenue.7,1 The fall and the loss of share coincide; the sources do not demonstrate that one caused the other.
2. The tax shock. The committee’s text shows Ncell expensing Rs 4,535 crore of capital gains tax in the year to mid-July 2019, producing a loss of Rs 3,152 crore (medium confidence; scanned text). About Rs 4,700 crore of tax was paid in cash between 2016 and 2020.3,4 The cash is established; the accounting treatment is the committee’s reading.
3. From no borrowing to Rs 2,200 crore, then back to 0.7 times operating profit. The committee reports no borrowings in the year to mid-July 2016 and about Rs 2,200 crore (more than half of sales) in the year to mid-July 2021. ICRA’s ratio of total debt to operating profit was 1.0 in 2022 and 0.7 in 2025. The dividend payout fell from about 90% to about 50% over the same years.3,1,2 The sources we read do not say why the borrowing began.
- 2001 to 2008: A private licence in a state market. What happened: Spice Nepal is registered in 2001, licensed in 2004 and starts service in September 2005 as Nepal’s first private GSM operator. The bet: Foreign capital and a private operator could build a national mobile network where state-owned Nepal Telecom had been the only provider. What it produced: By the year to mid-July 2019 Ncell took about 64% of GSM revenue (ICRA). The committee counts about 1.32 crore consumers by 2023. What it left behind: A business that earned more than the state-owned incumbent and a record of ownership changes: 14 transfers by the committee’s count.
- 2008 to 2015: TeliaSonera takes control. What happened: TeliaSonera buys a majority of the holding company in 2008; the brand becomes Ncell in 2010. The bet: Scale and a cash-generating telecom business with no borrowing. What it produced: By the year to mid-July 2016 the committee reports profit of about Rs 2,081 crore and no borrowings. What it left behind: A buyer, Axiata, willing to pay USD 103 crore for Telia’s 60.4% at 5.0 times EBITDA, and a tax question nobody had settled.
- 2015 to 2019: Axiata buys, and the tax follows. What happened: Axiata Investments (UK) buys Reynolds Holdings in a deal signed on 21 Dec 2015 and closed on 11 Apr 2016. The seller and the state disagree on who must pay capital gains tax. The bet: That the sale of an offshore holding company would not be taxed in Nepal, or would be taxed on the seller. What it produced: The Supreme Court (6 Feb 2019) holds Ncell and its new owner liable; a second judgment (21 Nov 2019) halves the tax office’s figure. Ncell expenses Rs 4,535 crore of tax in the year to mid-July 2019 and shows a loss of Rs 3,152 crore (the committee’s text, medium confidence). What it left behind: About Rs 4,700 crore paid and a precedent that a buyer and the operating company can be made to pay an offshore seller’s tax.
- 2017 to 2022: Revenue falls, dividends stay high. What happened: Revenue falls from about Rs 5,969 crore (year to mid-July 2018) to Rs 3,973 crore (2022); Axiata reports a 22.6% fall in calendar 2020 and ICRA describes a long decline in revenue per user and market share. The dividend payout stays near 90% to 2022. The bet: That a large payout could continue while the business was shrinking and the tax dispute continued. What it produced: Bank borrowing rises to about Rs 2,200 crore by the year to mid-July 2021 (the committee); Axiata writes off goodwill of RM 33.84 crore in the fourth quarter of 2021. What it left behind: A smaller business with a weaker current ratio, which ICRA puts at 0.65 to 0.86 times, and a rating agency that keeps flagging the payout.
- 2023: The arbitration ends and Axiata leaves. What happened: The tribunal dismisses the investors’ claims on 9 Jun 2023. On 1 Dec 2023 Axiata agrees to sell Reynolds to Spectrlite UK for USD 5 crore fixed plus a share of dividends to 2029. The bet: That a clean exit, with the buyer indemnifying Axiata against Nepali tax claims, was better than owning a company whose licence ends in 2029. What it produced: A price that is 3.7% of the 2016 price (our calculation), a Public Accounts Committee order to halt it, a High Court order stopping registration of the shares and a government inquiry, all within days. What it left behind: An owner of record that the regulator does not recognise, and a company still named after its old parent.
- 2024 to 2026: Renewal on conditions, then a handover plan. What happened: The licence is renewed for five years on 1 Sep 2024 for a Rs 2,000 crore fee in instalments; the cabinet decides not to accept the 2023 transaction as it stands; in 2026 the committee report is posted and then restrained, and the regulator tells Ncell to prepare a handover plan. The bet: That Ncell can keep investing while its owner is unrecognised and its licence horizon is three years. What it produced: ICRA raises the rated long-term loan limits to Rs 2,000 crore (Feb 2026) while noting the licence uncertainty; Ncell offers an IPO and 50% Nepali ownership if the licence continues. What it left behind: A licence decision in 2029 that the company, the regulator and the courts have not yet addressed.
The gap between operating profit and reported earnings is wide. At a 50% margin on revenue of Rs 3,255 crore, operating profit before depreciation is about Rs 1,630 crore. Advance income tax paid in the first nine months of the year to mid-July 2026 was Rs 125 crore; at 30% that implies a full-year pre-tax profit near Rs 600 crore after depreciation, interest and licence amortisation (our calculation, so low confidence).53,1
Two sales and a tax bill sit in the middle of that story. What did each sale say and cost?
08. USD 136.5 crore in 2016, USD 5 crore in 2023
2016. The sale of Reynolds Holdings closed offshore on 11 April 2016. Axiata puts its cost at USD 136.5 crore; Telia priced its own 60.4% at 5.0 times EBITDA. The tax consequences are the subject of the next chapter.32,4
2023. The terms below are Axiata’s announcement and, for what Axiata did not publish, the committee’s account of an agreement that is not public.
| Term | What the record shows | Basis |
|---|
| Parties | Axiata Investments (UK) Limited sells Reynolds Holding Limited to Spectrlite UK Limited, registered in the UK in Sep 2023 | Axiata, committee |
| Stake | Reynolds owns about 80% of Ncell; Sunivera Capital Venture holds 20% | Axiata, ICRA |
| Fixed price | USD 5 crore: USD 0.5 crore within six months of completion, USD 4.5 crore after 48 months (about Rs 666 crore in total) | Axiata |
| Conditional price | 80% of the 2023 dividend, 40% of 2024 and 2025, 30% of 2026 and 2027, 20% of 2028 and 2029 (the committee’s reading of the agreement; one outlet gives the same formula) | Committee, press |
| Smart Telecom clause | A further USD 1 crore if Smart Telecom’s licence is renewed or Ncell acquires it before 31 Dec 2029 | Committee |
| Tax | The buyer indemnifies the seller against Nepali tax claims, bears the cost of litigation and keeps the seller’s treaty rights; the seller may join as co-claimant | Axiata, committee |
| Security | A pledge over shares in a Cambodian company held through Southern Coast Ventures | Committee |
| Approvals | No prior approval from the regulator at signing (committee). Ncell’s position: the sale was a transfer of shares in its parent company, not of its own shares, and it applied afterwards | Committee, Ncell |
| Price implied by the fixed part | Rs 666 crore for 80%, or Rs 833 crore for 100%, before dividends and tax claims (our calculation) | Our calculation |
The agreement itself is not public. The terms other than the fixed price are the committee’s account of it. The committee called the agreement not at arm’s length and the headline price not the value of the transaction. 4,3,6,48,20
Axiata gave its reasons on 1 December 2023: “imminent and existential exposure arising from the scenario of double taxation”, the 2029 licence expiry “with the potential of expropriation”, and an unfavourable investment-protection environment.4 The committee disputes this: it argues Axiata earned a higher post-tax margin in Nepal than in Indonesia, Bangladesh or Sri Lanka, so the stated reasons are not based on facts. Axiata’s 2022 accounts, the committee notes, assumed the licence would be extended and a buy-back cost of nil in 2029; its board decided to exit on 29 September 2023.3 Both are on the record.
The committee’s own method has been questioned. A review reported in October 2026 says experts doubt that several of its conclusions rest on established evidence, and ask whether it reconciled the foreign-investment law’s rule of notifying a change in ownership within 30 days with the regulations’ rule of prior approval. That critique is about the report’s reasoning; it neither confirms nor refutes the findings, and the Supreme Court’s order restraining publication concerns the report’s confidentiality, not its truth.40,51
The fixed price, scaled to 100%, is Rs 833 crore. That is not the value of Ncell: the price excludes a share of dividends to 2029, a tax indemnity from the buyer and any valuation of the contingent liabilities. Adding our estimate of the present value of the dividend share, the price is about Rs 939 crore for 80% and Rs 1,174 crore for 100% (our calculation). Our Base equity value, before any tax claim, is Rs 1,704 crore, the same order of magnitude. We do not claim that makes the price fair.4,3
The committee’s conclusions on the agreement are its own: the seller keeps dividend rights to 2029, litigation rights and insulation from debts, so the agreement cannot be treated as an independent commercial transaction; it also found no application for prior approval. The buyer’s owner told the committee the enterprise value was about USD 40 to 45 crore, and Ncell stated about USD 40 crore at the time.3,21
The reaction came within days. The Public Accounts Committee ordered a halt on 6 December, the cabinet formed the study committee on 7 December, and the same day the Patan High Court ordered the registrar not to register the traded shares, continued on 11 December. The cabinet decided on 18 February 2024 not to accept the transaction in its current form.18,22,19
The sale is one side. What did the 2016 sale cost in tax?
09. Assessed, paid, disputed and outstanding are four different numbers
The tax dispute is a chain of proceedings on two transactions. The table gives each step with its amount, what was paid, who decided and what happened next. We do not add amounts from different proceedings.
| Date | Event | Parties | Tax issue | Claimed or assessed | Paid, if verified | Decision | Appeal or next step | Status | Primary source |
|---|
| 11 Apr 2016 | Sale of Reynolds to Axiata Investments (UK) closes offshore | Telia, Axiata, Ncell, tax office | Capital gains on the sale; who pays | Rs 6,071 crore (June 2017, as reported) | Rs 997 crore (May 2016); Rs 1,360 crore (4 Jun 2017) | Tax office pressed Ncell to pay | Supreme Court petitions | Concluded by the 2019 judgment | Press: Kathmandu Post, myRepublica |
| 6 Feb 2019 (full text 9 Apr) | Extended full bench | Petitioners v. Ncell, Axiata, tax office | Section 57(1): change of 50% or more of underlying ownership | About Rs 3,900 crore unpaid; Rs 6,100 crore total (tax office) | Rs 2,100 crore by then (tax office) | Court finding: Ncell and Axiata liable; share sales and bonus barred until paid | Ncell reviewed; assessment followed | Concluded | Judgment as reported |
| 16 Apr 2019 | Assessment after the judgment | Large Taxpayers’ Office, Ncell | Tax and penalty | Rs 6,263 crore in total; Rs 3,906 crore balance demanded | Rs 2,357 crore paid | Administrative assessment | Ncell petitioned (writ of 22 Apr 2019) | Superseded by the Nov 2019 judgment | Press: Business 360, Himalayan Times |
| 21 Nov 2019 (full text) | Supreme Court on Ncell’s second writ | Ncell, Large Taxpayers’ Office | Section 120(A): the determination of 16 Apr 2019 groundless in part | Rs 6,263 crore determined; Rs 3,906 crore balance demanded | Rs 2,357 crore before; Rs 450 crore first instalment (Dec 2019) | Court finding: determination halved; Rs 2,110 crore remaining (The Himalayan Times: Rs 2,240 crore) | Tax office asked for payment within 15 days | Concluded as to the remaining amount | Press: myRepublica, Nepali Telecom, OnlineKhabar |
| 2016 to 2020 | Total settled | Ncell | Capital gains tax, fines and penalties | n/a | About Rs 4,700 crore (Axiata; ICRA) | Axiata: tax office confirmed in Apr 2020 nothing further due | Reassessment Jan 2021 | Closed on Axiata’s account | Axiata release; ICRA |
| Jan 2021 | Reassessment on the same sale | Large Taxpayers’ Office, Ncell | Section 57 again | Rs 5,790 crore (Axiata); about Rs 6,000 crore reassessed, Rs 1,399 crore more than paid (press) | None | Supreme Court interim order not to collect, 7 Feb 2021 | Writ pending; a bench asked for the arbitration award | Pending, stayed | Axiata; Himalayan Times |
| 9 Jun 2023 | ICSID award | Axiata UK, Ncell v. Nepal | Treaty claims on the 2016 tax | Claim about USD 42.2 crore (Nepal’s counsel) | Nepal to pay about USD 0.14 crore | Tribunal award: claims dismissed | Axiata: Nepal should refrain from enforcing 2021 assessment | Concluded; effect disputed | Axiata; Foley Hoag |
| Dec 2023 onward | Change of owner of Reynolds | Ncell, buyer, tax authorities | Possible section 57 tax on the 2023 change | None found | Ncell says it paid about Rs 169 crore on 26 Feb 2024, which it describes as settling its section 57 liability for the change (company’s account) | None found; the cabinet is reported to have ordered a fresh tax audit from the year to mid-July 2020 | ICRA flags exposure to a further assessment | Unassessed in the sources; payment not confirmed by the tax office | ICRA; Khabarhub; Nepal News |
| To mid-2025 | Ten pending matters counted by the committee | Ncell, tax authorities, courts | Income tax, VAT, advance tax, capital gains and ownership change | Over Rs 8,500 crore claimed, tax and non-tax: contested claims, not final liabilities (committee); contingent liabilities about Rs 8,600 crore (ICRA) | n/a | Before administrative review, the revenue tribunal and courts | Pending | Pending | Committee; ICRA |
Assessed is what an authority says is due; paid is what left the company; disputed is what the company contests in a forum; outstanding is the unpaid balance not under stay; a final judicial determination is a judgment that ends all appeal. Amounts from different proceedings are not added. The Supreme Court decided in 2019 who pays the 2016 tax and, in November 2019, how much remained; whether the 2021 assessment survives has not been decided. Interest and penalties are included in the figures as the source states them. 24,26,27,4,5,30,1,3,31,34,36,39
What the 2019 judgment decided. An extended full bench held that section 57(1) of the Income Tax Act applies where the underlying ownership of an entity changes by 50% or more. It treated Ncell as the entity, the licence as the asset and the change from TeliaSonera to Axiata as a disposal, taxed at 15% under section 95A(2)(b), payable by Ncell and Axiata. It also said the state had lost about Rs 3,900 crore through the tax officials’ lapses and barred Ncell from selling shares or paying bonus until the tax was paid.25,24 That is a court finding.
What it did not decide, and the second judgment. The first judgment did not fix the amount. The tax office determined Rs 6,263 crore in total on 16 April 2019 and demanded the Rs 3,906 crore balance after Rs 2,357 crore had been paid. Ncell went back to the Supreme Court. On 21 November 2019 a five-member larger bench found the determination groundless in part and, under section 120(A) of the Income Tax Act, halved it: Rs 2,110 crore remained (court finding, as the full-text reports give it). Ncell deposited Rs 450 crore as a first instalment. The Himalayan Times puts the outstanding amount at Rs 2,240 crore; sources differ. Axiata and ICRA say about Rs 4,700 crore was paid in total including fines and penalties; the court’s own figures (Rs 2,357 crore plus Rs 2,110 crore) sum to Rs 4,467 crore, and we do not know what makes up the difference. Axiata also says the tax office confirmed in April 2020 that nothing more was due.26,27,34,35,36,4,1
The second assessment. In January 2021 the same office reassessed under section 57, a step the Inland Revenue Department described as correcting an inaccurate earlier amount. Axiata’s figure is Rs 5,790 crore including interest to 13 January 2021; The Himalayan Times put the reassessed tax at about Rs 6,000 crore, Rs 1,399 crore more than paid. Sources differ on what the number means.27,4 A Supreme Court single bench ordered on 7 February 2021 that it not be collected. A later bench asked for the arbitration award before ruling on Ncell’s writ. We found no final ruling.28,29
The arbitration. Axiata and Ncell took Nepal to ICSID under the UK-Nepal investment treaty. The tribunal dismissed all claims on 9 June 2023. Nepal’s counsel says the tribunal found Nepal had given no assurances, deferred to the Supreme Court’s reading of the Income Tax Act and found no collusion, and ordered about USD 0.14 crore for a procedural breach; Axiata says the tribunal indicated that Nepal should refrain from further demands on the 2016 transaction, and later that it should not enforce the 2021 assessment. We could not open the award, and the two accounts differ.30,5,4
On Axiata’s own arithmetic, if the 2021 assessment were upheld, total tax on the USD 136.5 crore deal would be USD 85.55 crore, 62.7% of its value. A disputed amount is not a final liability, and this one is stayed; it is shown here as exposure, not as debt.4
Still open. ICRA says Ncell remains exposed to a further assessment for the 2023 change of owner. Ncell says it paid about Rs 169 crore on 26 February 2024, which it describes as settling its section 57 liability for that change; the cabinet decision of 18 February 2024 is reported to have ordered a fresh tax audit from the year to mid-July 2020. We found no assessment.48,39 The committee counts ten pending matters worth over Rs 8,500 crore across income tax, VAT, advance tax, capital gains tax and ownership-change tax.1,3 ICRA’s contingent liabilities of about Rs 8,600 crore, two thirds of them tax claims on the 2016 change, are disclosed but not provided.1
Why this matters. The judgment makes the operating company, not only the foreign owner, answerable for a tax on an offshore sale. That is why a buyer of Ncell, or a lender to it, cannot treat the 2016 history as the seller’s problem.
Tax is one strand. What else has been alleged or decided?
10. Fifteen matters, each with its exact status
Each card gives what happened, who said what, what a court or regulator decided and what is unknown. An allegation is not a finding; a committee report is not a judgment; everyone named is presumed innocent.
15 matters, newest checked 23 October 2026.
- L1 Capital gains tax on the 2016 sale: the Supreme Court’s two 2019 judgments. Status: Court findings of Feb and Nov 2019; the 2016 liability was paid. The question reopened in 2021 (L2). Role: Taxpayer made liable by the court. Forum: Supreme Court of Nepal, extended full bench (the Chief Justice and four justices). Allegation: Petitioners argued that the sale of the St Kitts holding company was taxable in Nepal and that Ncell and the buyer, not only the seller, could be made to pay. The Auditor General had concluded in 2017 that the gain was taxable.24 Response: Telia said all its tax requirements were met. Axiata had argued that paying was the seller’s duty. Ncell paid part of the tax in 2017 while maintaining that it was not fully liable, and after the judgment said it was reviewing the decision without prejudice to its remedies.32,24,25 Latest: Closed as to the 2016 liability, on the court’s terms. Axiata says the tax office confirmed in April 2020 that nothing further was due; the tax office reassessed in January 2021 (L2).4 Imposed: Rs 6,263 crore determined on 16 Apr 2019, halved in part by the Nov 2019 judgment (Rs 2,110 crore remaining); claimed: Rs 6,071 crore of capital gains tax (Large Taxpayers’ Office, June 2017, as reported); recognised in the accounts: Paid: about Rs 4,700 crore including fines and penalties (Axiata and ICRA); Rs 4,467 crore on the court’s figures. Sources: 24,23,25,26,27,2,1,4,3,31,32,34,35,36 Last checked 2026-10-23.
- L2 The January 2021 reassessment on the same sale (Rs 5,790 crore), under stay. Status: Collection stayed by a Supreme Court interim order; no final ruling found. Role: Taxpayer contesting the assessment. Forum: Supreme Court of Nepal (writ petition by Ncell). Allegation: The tax office says the earlier amount paid was not accurate and that it may reassess a large taxpayer. A department official called it a reassessment of tax.27 Response: Ncell petitioned the court. Axiata says the tax office had confirmed in April 2020 that no further tax remained, and that the arbitration award indicates Nepal should refrain from enforcing this assessment.4,5 Latest: Pending. We searched Nepali and English press and the court names to 23 Oct 2026 and found no ruling. Imposed: None: not collectable while the stay lasts; claimed: Axiata: about Rs 5,790 crore including interest to 13 Jan 2021 and penalties. The Himalayan Times (2021): reassessed tax of about Rs 6,000 crore, which would be about Rs 1,399 crore more than already paid. Sources differ.; recognised in the accounts: Disclosed as a contingent liability: about two thirds of Rs 8,600 crore (ICRA). Sources: 4,27,28,29,1 Last checked 2026-10-23.
- L3 The investment-treaty arbitration (ICSID ARB/19/15) and its award of 9 June 2023. Status: Award issued: claims dismissed. Its effect on the 2021 assessment is disputed. Role: Claimant (with its then parent). Forum: International Centre for Settlement of Investment Disputes, tribunal of three arbitrators. Allegation: The investors said Nepal had gone back on assurances not to tax the 2016 gain, that the Supreme Court’s judgments denied them justice and that several agencies acted together to force payment. Nepal’s counsel puts the claim at about USD 42.2 crore.30,5 Response: Nepal’s counsel reports that the tribunal found Nepal had given no assurances, deferred to the Supreme Court’s reading of its own tax law and found no evidence of collusion by the agencies. This is one party’s account of an award we could not open.30 Latest: Concluded. Whether the award bars the 2021 assessment is a question for the Supreme Court; Axiata said in Dec 2023 the assessment had not been withdrawn.4 Imposed: About USD 0.14 crore payable by Nepal (procedural); claimed: About USD 42.2 crore claimed by the investors; recognised in the accounts: n/a. Sources: 5,30,26,4,57,3 Last checked 2026-10-23.
- L4 Parliament’s Public Accounts Committee and the cabinet decision of 18 Feb 2024. Status: Decisions taken; implementation continues (see L6 and L9). Role: Subject of the inquiry. Forum: Parliament and the Council of Ministers. Allegation: The PAC called the sale process “suspicious, non-transparent and unrealistic”, citing non-compliance with legal provisions, an unrealistically low value, efforts to avoid capital gains tax and doubt over government ownership after six years. These are the committee’s words, not a court’s findings.18 Response: Ncell said the deal was on a willing buyer, willing seller basis, complied with Nepali law and placed Ncell’s enterprise value at about USD 40 crore; its employee union rejected any wrongdoing.21 Defence and critique: a review reported in October 2026 says experts question whether the committee’s conclusions rest on evidence rather than assumption, and whether it reconciled the foreign-investment law’s rule of notification within 30 days of a change in ownership with the regulations’ prior-approval rule.40 Latest: The recommendations include investigating revenue leakage, foreign-exchange offences and money laundering, securing state ownership of assets after the licence period and restructuring the regulator.3 Imposed: n/a; claimed: n/a; recognised in the accounts: n/a. Sources: 18,3,19,48,21,15,40 Last checked 2026-10-23.
- L5 Has the regulator recognised the sale of the 80%? Not yet. Status: No recognition and no decision found; the Supreme Court sent the matter to the regulator. Role: Licensee. Forum: Nepal Telecommunications Authority. Allegation: The Authority’s position is that prior approval was required for a transfer above 5% of paid-up capital and was not sought; the committee found no application had been filed.47,3 Response: Ncell’s position: the deal was a transfer of shares in its parent company, not of Ncell’s own shares; it applied to the Department of Industry and to the regulator within the time the foreign-investment law allows, although prior approval was “practically challenging”; and the regulator assessed the buyer’s technical, financial and managerial capacity when it renewed the licence in 2024. The committee, reporting in January 2024, found no application had been filed with the regulator; one outlet reports that the buyer applied in March 2024 and the application is undecided. Sources differ. Ncell has asked the Prime Minister’s office to revisit the cabinet decision and the licence conditions.49,48,3,50,39 Latest: Pending: no recognition and no penalty found as at 23 Oct 2026. ICRA’s February 2026 report still describes the transfer as pending approval and the legal name as unchanged.1 Imposed: None; claimed: n/a; recognised in the accounts: n/a. Sources: 47,46,3,49,48,44,1,41,50 Last checked 2026-10-23.
- L6 Supreme Court: the lawmaker’s petition to cancel the 2023 agreement. Status: Petition dismissed on 26 Dec 2024; the regulator’s duty to decide was confirmed. Role: Respondent. Forum: Supreme Court of Nepal, joint bench of two justices. Allegation: The petitioner asked the court to annul the share purchase and sale agreement.47 Response: Ncell’s defence is in L5. Latest: Concluded. Imposed: None; claimed: n/a; recognised in the accounts: n/a. Sources: 46,47 Last checked 2026-10-23.
- L7 Patan High Court: registration of the traded shares. Status: Interim order continued; outcome not found. Role: Respondent. Forum: Patan High Court. Allegation: The petitioner asked the court not to recognise the share transfer.22 Response: Not found. Latest: Outcome not found: we searched English and Nepali press for 2024 to 2026 and found no ruling. Imposed: None; claimed: n/a; recognised in the accounts: n/a. Sources: 22 Last checked 2026-10-23.
- L8 Ncell’s petition against publication of the committee report. Status: Interim order of 14 Aug 2026; government’s reply was due in 15 days. Role: Petitioner. Forum: Supreme Court of Nepal, single bench. Allegation: Ncell’s petition against publication says the report holds commercial secrets and details of individuals’ investments. The court’s order cites the constitutional right to privacy.51 Response: The government had already posted the report on the ministry’s website.51 Latest: Pending. Imposed: None; claimed: n/a; recognised in the accounts: n/a. Sources: 51,15 Last checked 2026-10-23.
- L9 Police investigation of the share transactions. Status: Investigation reported in July 2026; the charge sheet found relates to the Smart Telecom auction (L15). Role: Subject of the investigation (with investors and others). Forum: Police investigation. Allegation: The government says the bureau has been directed to investigate allegations of fraud, criminal breach of trust, tax evasion, unlawful transfer of investment abroad and irregularities in obtaining licences, with help from the central bank. The report also said legal action might follow against investors, senior executives and officials of the ministry and the regulator. The same report says shares allotted to seven employees in 2020 are under investigation. These are allegations under investigation, not charges.16,17 Response: Ncell objects to the committee’s findings and its publication (L8); the buyer’s and others’ responses to the police are not public.51 Latest: Pending. A charge sheet specifically on the Axiata and Spectrlite transaction was not found, but the charge sheet of 12 Aug 2026 in the Smart Telecom case brings that transaction into its allegations (L15). Some defendants in that case were arrested during the investigation.37 Imposed: None; claimed: n/a; recognised in the accounts: n/a. Sources: 16,17 Last checked 2026-10-23.
- L10 Frequency-fee arrears on the 2100 MHz band. Status: Before the Supreme Court, per the regulator’s letter to the committee; amount partly illegible. Role: Licensee. Forum: Supreme Court of Nepal. Allegation: The regulator says additional frequency fees on the 2100 MHz band are unpaid.3 Response: Not found. Latest: Pending per the regulator’s letter. The first digit of the amount (“__ arba 72 crore 68 lakh”) is lost in the scan’s binding margin; at least Rs 72.68 crore. Imposed: None; claimed: At least Rs 72.68 crore; first digit of the arba figure illegible; recognised in the accounts: Not known. Sources: 3 Last checked 2026-10-23.
- L11 Auto-renewal charges: the regulator’s refund order of 2021. Status: Refund of Rs 111 crore ordered; Ncell contested it; outcome not found. Role: Licensee. Forum: Nepal Telecommunications Authority; Ministry of Communication and Information Technology. Allegation: Customers said Ncell auto-renewed paid services (app and game subscriptions) from their main balance without consent. The regulator found Ncell had breached its licence terms.59 Response: Ncell said the services came from third parties, that balance was used for payment and that it had proceeded with customers’ approval since September 2020. The regulator was not persuaded; Ncell asked the ministry to review.59 Latest: Outcome of the appeal not found. Imposed: Fine Rs 50,000; refund order about Rs 111 crore; claimed: n/a; recognised in the accounts: Not known. Sources: 59,3 Last checked 2026-10-23.
- L12 Dividend remittance blocked, then cleared (2017 to 2018). Status: Concluded by a Supreme Court order of 24 Dec 2017. Role: Party seeking repatriation. Forum: Supreme Court of Nepal, two justices. Allegation: On the tax office’s request the central bank told banks not to provide foreign exchange to Ncell, Axiata and Reynolds Holdings.31 Response: The court held that obstructing repatriation would harm the company and shareholders and that the investment and exchange laws allow profits to be sent back.31 Latest: Concluded; a repatriation backlog persists. Imposed: None; claimed: n/a; recognised in the accounts: Rs 748 crore payable (Oct 2025). Sources: 31,2,1 Last checked 2026-10-23.
- L13 Possible tax on the 2023 change of owner. Status: No assessment found; the rating agency flags the exposure. Role: Potential taxpayer. Forum: None yet. Allegation: ICRA says Ncell “remains exposed to further assessment by taxation authorities in Nepal on account of the additional change in indirect majority ownership in 2023”. The committee reads section 57 as treating a change of ownership as a disposal at market value, and said a due-diligence valuation would fix the value.1,3 Response: Ncell says it has paid Rs 169 crore of tax after filing separate statements following the transaction and is ready to pay any further tax determined under the law; one outlet dates the payment to 26 Feb 2024 and says Ncell describes it as settling its section 57 liability for the change. Axiata says the buyer indemnifies it against Nepali tax claims. The cabinet decision of 18 Feb 2024 is reported to have ordered a fresh tax audit from the year to mid-July 2020.48,4,39 Latest: Unassessed in every source we read, to 23 Oct 2026. We searched English and Nepali press for an assessment and found none. Imposed: None; claimed: None; recognised in the accounts: None. Sources: 1,3,48,4,25,39 Last checked 2026-10-23.
- L14 Smart Telecom: the committee’s concern about cross-holding. Status: A committee concern, not tested by a court or the regulator. Role: Subject of the concern. Forum: None. Allegation: The committee notes a clause that obliges the buyer to pay the seller a further USD 1 crore if Smart Telecom’s licence is renewed or Ncell acquires it, and concludes there may be a financial interest relationship between the shareholders of Ncell and Smart Telecom. It also noted that one director of Smart Telecom had been a director of an entity that held the Ncell stake. This is the committee’s concern, not a finding of fact by a court.15,3 Response: Not found. Latest: No regulator or court decision on any link was found. Imposed: None; claimed: USD 1 crore contingent payment under the agreement (not a claim against Ncell); recognised in the accounts: n/a. Sources: 15,3,45,44 Last checked 2026-10-23.
- L15 The Smart Telecom auction: charge sheet against 22 defendants. Status: Charge sheet filed 12 Aug 2026 in the Kathmandu District Court; allegations only, no court finding. Role: Buyer at the auction; its chairman, a board member and directors are among the defendants (alleged). Forum: Kathmandu District Court, on a report of the Central Investigation Bureau. Allegation: Prosecutors allege fraud, criminal breach of trust, organised crime and banking-law offences. Their case is that Smart Telecom’s assets were already under state control after the regulator took them over in 2023, so the bank could not auction them; that the two lower bids (Rs 45 crore and Rs 42 crore) were not genuine competition against Ncell’s Rs 460 crore; that government valuation work put the physical assets at about Rs 40 crore; and that ownership ties between Smart Telecom’s early investors and Ncell’s Nepali partners matter. The charge sheet also brings the 2023 share transaction into the case. Rs 9,612 crore is sought as recovery.37,38 Response: The bank and the banking sector argue that a secured lender may recover loans by auctioning pledged collateral and that this is not criminal; the court must decide which legal regime applied. The Supreme Court ordered the bank’s chief executive released while the investigation continued. Ncell’s own answer to the charge sheet was not found in the sources we read. The reporting notes that the prosecution attributes different acts to different defendants and stresses that being named is not a finding of guilt.37,38 Latest: Pending in court as at 23 Oct 2026. The matter is separate from the Axiata and Spectrlite sale (L4 to L6); one is a criminal prosecution, the other a regulatory and ownership dispute, and neither is proof of the other.37 Imposed: None; claimed: Rs 9,612 crore recovery sought (prosecutors’ calculation of loss and recoverable amounts, from the defendants, not a court order); Rs 460 crore paid by Ncell at the auction; recognised in the accounts: None. Sources: 37,38,45,39 Last checked 2026-10-23.
Where nothing turned up: we searched English-language press to 23 October 2026 for a data-protection or cybersecurity incident at Ncell and for a 2025 or 2026 service-quality penalty, and found no Ncell-specific item for either. We did not search separately for competition-law cases, and we did not open the regulator’s spectrum notices, so a spectrum dispute beyond the 2100 MHz frequency-fee matter in the register is unknown rather than absent.
The largest new item is L15, the Smart Telecom auction. Ncell’s Rs 460 crore bid was accepted on 6 October 2025, against rival bids of Rs 45 crore and Rs 42 crore. Prosecutors say the assets had passed into state control when Smart Telecom’s licence lapsed in April 2023, so the bank could not sell them, and that the low bids were not genuine competition; the bank and the banking sector say a secured lender may lawfully auction pledged collateral. Defendants include Ncell’s chairman and directors, bank officials and a former chairman of the regulator. Some were arrested and later released. The court has decided nothing, and the case is separate from the Axiata sale.37,38
Service-practice directions are small: the regulator fined Ncell Rs 5 lakh in November 2015 for a service without a licence, Rs 50,000 and Rs 5 lakh in 2020 for service offers and auto-renewals, and ordered the Rs 111 crore refund of 2021 (the committee’s list and the regulator’s decision).3,59
What do the financial statements, such as they are, reveal?
11. The questions we can answer, and the ones we cannot
These are research questions, not conclusions. For each we say what the record shows and where it stops.
| Question | What the record shows | Reading |
|---|
| Is revenue growing while cash generation weakens? | Revenue has fallen every year since 2018 in the figures we have; operating margin slipped from 55% to 50%; cash flow statements are not published | Revenue is falling; cash generation cannot be tested |
| Is the company distributing more than its free cash flow supports? | Payout was about 90% to 2022, then about 70%, then about 50%; debt rose to Rs 2,200 crore by 2021 and bank debt now sits at 0.7 to 0.9 times operating profit | Payout has been cut; we cannot compute free cash flow |
| Are margins affected by exceptional items? | The year to mid-July 2019 shows a Rs 3,152 crore loss because Rs 4,535 crore of tax was expensed; later years have no stated one-offs | One clear exceptional item |
| Are related-party balances material? | Technical-service fees are paid in US dollars to Axiata-linked entities (the committee’s table); the amounts are not legible enough to use | Not established |
| Are tax and licence obligations in the statements? | Contingent liabilities of about Rs 8,600 crore are disclosed but not provided; ICRA notes the licence fee is payable in instalments | Disclosed, not provided |
| How much capital spending is needed? | The company’s statement: more than Rs 13,000 crore in 21 years; ICRA raised the rated long-term limits to Rs 2,000 crore; 5G is not funded | Substantial, under a three-year licence |
| How sensitive is value to regulation? | In our valuation the Base enterprise value is Rs 2,814 crore if the licence continues, Rs 1,373 crore on a negotiated transition and Rs 1,180 crore if it ends in 2029 | Highly sensitive |
These are research questions, answered from the figures we could read; every “not established” is a gap in what is published. 1,3,52
Our view: the most important thing the statements reveal is how little is published. A company with Rs 3,254 crore of revenue, Rs 8,600 crore of contingent liabilities and a third-party owner has no public balance sheet. The audited numbers a lender sees are not available to a shareholder, a customer or a reader.
The licence is the asset. What happens to it in 2029?
12. A date, a section of the Act and three possible futures
Ncell’s initial 25-year licence ends on 1 September 2029. Section 33 of the Telecommunications Act, as the committee quotes Axiata’s accounts, says that when the licence of a company with more than 50% foreign investment expires, its land, buildings, plant and equipment pass to the government; the Act is silent on the process. Press reports describe the provision in the same terms.3,45 We could not open the Act’s official text.
| Date | Event | What it means | Basis |
|---|
| BS 2056/07/15 | Regulator’s letter of intent (about Oct 1999) | Start of the licence process | Committee |
| 1 Sep 2004 | GSM-900 licence under the Telecommunications Act 2053 | Initial 10 years, renewed in five-year steps | Committee |
| Sep 2005 | Service starts | First private GSM operator | ICRA |
| 1 Sep 2024 | Renewed for five years | Fee Rs 2,000 crore in instalments with 10% interest; no change to share structure | ShareSansar |
| 28 Oct 2024 | Tenth Amendment to the Regulations | Re-issue after 25 years allowed only for a licensee with up to 50% foreign ownership; at most 25 years, at most 10 at a time. The law firm reads the test as foreign ownership when re-issue is sought; Ncell says the amendment looks at the share structure when the licence was obtained, applies retrospectively and targets the company (sources differ) | Law-firm note; Ncell |
| 29 Apr 2024 | Government announcement | Reported by one outlet: the government says it will take ownership of Ncell’s physical assets when the licence ends, citing section 33; we did not find the announcement itself | Nepal News |
| Sep to Oct 2026 | Regulator’s direction | Prepare a handover plan under the 2079 asset-management regulation | Fiscal Nepal |
| 1 Sep 2029 | Initial 25-year term ends | Section 33 applies to a licensee with more than 50% foreign investment | ICRA, committee |
ICRA gives 1 Sep 2029; the regulator’s directive cites BS 2086/05/16; one outlet printed 29 Aug 2029. Section 33 is quoted from the committee’s reading of Axiata’s accounts and press summaries; we could not open the Act’s official text. Legal experts quoted by the press argue that a regulation cannot override the Act. 3,1,41,43,48,44,45,39
Three facts pull in different directions. The regulator renewed the licence for five years in 2024. The Tenth Amendment of October 2024 lets a licensee seek re-issue only if foreign ownership is at most 50%, for up to 25 years but no more than 10 at a time. And the regulator has now told Ncell to prepare a handover action plan under the 2079 asset-management regulation.42,43,44 Legal experts quoted by the press argue that a regulation cannot override the Act; the point has not been decided.45
Smart Telecom is the precedent people cite: its licence was revoked on 17 April 2023 and ownership of its towers and equipment is disputed.45,44 Ncell offered on 7 January 2026 to issue shares to the public and institutions for 50% and to bring Nepali ownership to 50% if the licence continues, and warned it might go to international courts as a last resort.50
The three futures are analytical scenarios. None is a prediction.
| A: Regulatory continuity | B: Negotiated transition | C: Adverse disruption |
|---|
| What would have to happen | The licence is re-issued or renewed on workable terms and the transfer is recognised or regularised | Ownership or licence terms change: an IPO and 50% Nepali ownership, a fee, a buy-back of assets, or a new holder | The regulator or courts refuse recognition, licence cancellation proceedings start, or assets pass to the state at expiry on poor terms |
| Legal basis | Section 33(4) and the Tenth Amendment, if foreign ownership is brought to 50% or less; cabinet policy | Section 33 vesting with a right to re-buy (as the committee reads it); negotiated terms | Section 33 vesting; the 2079 asset-management regulation; penalties under the Act |
| Evidence for | Ncell is renewing and paying; it offers an IPO; the regulator renewed in 2024 on conditions | The regulator is asking for a handover plan while Ncell asks to be renewed; the committee reads the rules as giving a former licensee a first right to re-buy the assets and operate | The cabinet declined the 2023 deal; the committee recommends securing assets; police inquiry; Smart Telecom’s licence was revoked in 2023 |
| Evidence against | No policy decision has been made; the cabinet has not reversed itself | No negotiation is public | The regulator has not penalised Ncell in three years and keeps approving services |
| Financial consequence | Cash flows continue beyond 2029 | Value falls by the fee and buy-back; Ncell keeps a smaller business | Value stops in 2029, or sooner, and the owners may recover little |
| What it means for others | Customers and staff see continuity; creditors are repaid from operations; the state collects fees | Creditors repaid before expiry (bank debt is scheduled to be repaid by then); staff and customers see a new owner | Customers face disruption; creditors rely on pre-2029 repayment; the state takes the network |
| What would signal it | A cabinet decision; a recognition by the regulator; an IPO prospectus | A written offer; talks reported by both sides | A cancellation notice; a charge sheet; an order on the handover plan |
These are analytical scenarios, not predictions, and none is inevitable. Our valuation weights them 30%, 40% and 30% in the Base case, with Bear and Bull cases weighted differently; the weights are our judgement. 3,45,43,50,44,48
Who is affected. Customers face continuity in A, a changed owner in B and disruption in C. Employees: Ncell says it supports more than 1 lakh direct and indirect jobs (the company’s figure).48 Creditors: ICRA notes that bank term debt is scheduled to be repaid before 2029.1 Shareholders bear the whole of the licence risk. Competition: a removal of the only private operator would leave a state operator; the opposite case is a larger private operator with a 5G licence.
What is it worth, given all that?
13. The committee, the price, the multiple and our own view
Several numbers describe Ncell’s value, and they are not close. They answer different questions, so we label each.
| View | Value of the company | What it assumes | Label |
|---|
| 2023 fixed price, scaled to 100% | Equity Rs 833 crore | A single fixed payment; excludes dividends to 2029 and tax claims | Our calculation |
| Our valuation, Base case | Equity Rs 1,704 crore (enterprise value Rs 1,748 crore); range across cases Rs 744 to 4,319 crore equity | Three licence outcomes weighted; renewal fee Rs 2,000 crore; buy-back Rs 2,000 crore; tax claims shown beside, not deducted | Our view |
| Value only until the licence ends (Base) | Enterprise value Rs 1,180 crore | Cash flows to 1 Sep 2029, none after | Our calculation |
| Nepal Telecom multiples applied to Ncell | Enterprise value Rs 9,400 to 12,200 crore | Continuity, and Nepal Telecom’s 5.84 times reported or 7.58 times core EBITDA on Ncell’s 2026 estimate of Rs 1,610 crore | Our calculation |
| Committee’s enterprise value | Rs 14,800 to 18,000 crore | Continuity, no renewal fee, no tax claims, multiples of 5 to 8 times EBITDA | Committee |
| Ncell’s statement of 2023, and the buyer’s to the committee | Enterprise value USD 40 to 45 crore (about Rs 5,300 to 6,000 crore) | Not documented | Reported |
The gap between our view and the committee’s comes from three assumptions: whether the licence continues without a renewal fee and buy-back, the margin held after 2029, and whether tax claims are deducted. Our valuation is published separately and is not investment advice; it is a range, not a price, for a company with no market price. 3,21,10,11,1
Our view: the committee’s Rs 14,800 to 18,000 crore holds only if Ncell keeps the licence indefinitely, pays no renewal fee and owes no tax. The 2023 price is closer to what the company would be worth if the licence ended. Our valuation puts a weighted Base value of Rs 1,704 crore on the equity because it asks what a buyer would actually receive in each licence outcome. Confidence is low: there are no published statements, no balance sheet and no cash-flow data.
The valuation is in a separate publication with its inputs, scenarios and sensitivity tables. We do not report a value per share, because Ncell has none.
What should investors, customers and policymakers watch?
14. What could go wrong, ranked, and what would change our view
- The licence ends on 1 Sep 2029: HIGH. Section 33 of the Telecommunications Act, as the committee quotes it from Axiata’s accounts, passes land, buildings and equipment to the state when the licence of a company with more than 50% foreign investment expires; the Act is silent on the process. The Tenth Amendment of Oct 2024 allows re-issue only for a licensee with up to 50% foreign ownership. The regulator has asked for a handover plan. What would change our view: A cabinet or regulator decision to re-issue on workable terms; a clear buy-back process; or Ncell reducing foreign ownership to 50% through an IPO.
- The 80% owner is not recognised: HIGH. The regulator has not recognised the 2023 transfer and may approve, penalise or take other action. The licence renewal forbids any change in share structure. Ncell says it cannot make payments to the seller meanwhile. What would change our view: A recognition decision by the regulator, or a penalty or cancellation notice.
- Tax claims on the ownership changes: HIGH. Contingent liabilities were about Rs 8,600 crore at mid-July 2025, about two thirds being tax claims on the 2016 change. A Rs 5,790 crore assessment is under a stay. ICRA also flags exposure to an assessment on the 2023 change. What would change our view: A Supreme Court ruling on the writ; the court taking the arbitration award into account; any assessment on the 2023 change.
- Criminal case and investigation: HIGH. A charge sheet of 12 Aug 2026 names 22 defendants, among them Ncell’s chairman and directors, over the October 2025 auction of Smart Telecom’s assets to Ncell for Rs 460 crore, and seeks recovery of Rs 9,612 crore. It also brings the 2023 share transaction into its allegations. Separately the government says police are investigating fraud, breach of trust, tax evasion and unlawful transfers abroad linked to the share transactions. These are allegations; the court has decided nothing and everyone named is presumed innocent. What would change our view: A court ruling on who owned the Smart Telecom assets; a withdrawal of the charges; or a conviction or acquittal of any defendant.
- Shrinking revenue and market share: MEDIUM. Revenue fell 45% from 2018 to 2025 and Ncell’s share of GSM revenue from about 64% to about 51%. The first quarter to mid-October 2025 was Rs 819 crore, about 1.4% below the year before. What would change our view: Two successive quarters of growth in data ARPU and subscribers.
- Liquidity and payables: MEDIUM. The current ratio was 0.74 at mid-October 2025 because of large capital-spending payables. Cash was about Rs 1,400 crore. Rs 748 crore of dividends await central bank approval. What would change our view: Settlement of supplier payables and approval of the pending remittances.
- Investing under a three-year licence: MEDIUM. Ncell says a 5G investment would take up to eight years to recover and that it cannot commit without a licence beyond 2029. The company also carries a Rs 2,000 crore renewal fee. What would change our view: A 5G spectrum auction with a licence horizon that covers the payback.
- Disclosure: LOW. Ncell publishes no financial statements we could find. The only audited figures are those a rating agency reports from company data. This does not prove a problem; it limits what can be checked. What would change our view: Publication of audited statements or a prospectus.
- At the Smart Telecom auction Ncell bid more than ten times either rival. Why it matters: Ncell’s Rs 460 crore against Rs 45 crore and Rs 42 crore. Prosecutors treat the gap as a reason to question the auction; the bank’s side says a lawful auction can have low bids. Neither view is a finding.
- Axiata sold Ncell’s 80% for 3.7% of what it paid. Why it matters: USD 5 crore fixed in 2023 against USD 136.5 crore in 2016 is 3.7% (our calculation). The 2023 price excludes a share of dividends to 2029, a tax indemnity from the buyer and any value of the contingent liabilities, so it is not a market value.
- If the 2021 assessment were upheld, tax on the 2016 deal would be 62.7% of its value. Why it matters: Axiata’s own arithmetic: USD 85.55 crore of total tax on a USD 136.5 crore transaction. The assessment is stayed, so this is a possibility, not a liability.
- Rs 9,351 crore of dividends were declared against a paid-up capital of Rs 10 crore. Why it matters: The committee counts dividends declared from 2012 to 2023; paid-up capital is Rs 10.0001 crore, so the ratio is about 935 to one (our calculation). Foreign capital brought in was Rs 8.0 crore plus USD 0.96 crore.
- Revenue is 45% below its 2018 peak. Why it matters: From about Rs 5,969 crore in the year to mid-July 2018 to Rs 3,254.5 crore in 2025 (our calculation on two sources).
- More than two years after the sale, the legal name still says Axiata. Why it matters: ICRA’s February 2026 report says the legal name remains unchanged because the transfer awaits regulatory approval.
- The company became a public limited company by issuing 11 shares. Why it matters: On 3 Aug 2020, 11 shares were issued to seven more individuals, 0.0011% of the company. The committee calls the process not natural; police are reported to be investigating it.
- Four numbers for one dividend. Why it matters: Dividends to the Nepali partners are printed as Rs 1,925 crore, 1,905 crore, 1,995 crore and 1,979 crore depending on which reading of the committee’s table you take. We use none of them.
What to watch, in the order it will matter:
1. The regulator’s decision on the 2023 transfer. Approve, penalise or take other action. 2. The Supreme Court’s ruling on the 2021 assessment, and whether it takes the arbitration award into account. 3. A cabinet decision on licence continuity: the Tenth Amendment, an IPO, a fee or a buy-back. 4. The criminal case over the Smart Telecom auction and the police investigation of the share transactions: rulings, withdrawals or further charges. 5. Published accounts of any kind. 6. Quarterly revenue against Rs 819 crore in the first quarter to mid-October 2025.46,29,50,16,1
- A suspicious deal, an investigation, a charge and a conviction are four different things. The 2023 sale is under a committee’s criticism and a regulator’s review; the Smart Telecom auction is under a charge sheet; neither is a court finding. Say which one you mean.3,37
- Assessed, paid and owed are three different numbers. Ncell has been assessed Rs 6,263 crore (2019), paid about Rs 4,700 crore and been assessed another Rs 5,790 crore (2021) that is stayed. Adding them gives a total no court has found.26,1,4
- A price is not a value. The 2023 price of USD 5 crore excludes a share of dividends to 2029 and moves the risk of unquantified tax claims to the buyer. The committee refused to treat it as the company’s value, and so should you.4,3
- Read who has to approve. A transfer above 5% of paid-up capital needs the regulator’s prior approval. The deal closed without it, and nearly three years later the register has not caught up with the contract.3,46
- The rating agency may be the only auditor you can read. For an unlisted company that publishes nothing, the audited figures come second-hand. State what you could not see.1
- When outlets differ, show both. The dividends to Nepali partners appear as four figures and the 2021 assessment as two descriptions. We kept the difference in view.16,15,27,4
How did we check, and where do sources disagree?
15. What we read, what we could not, and where sources differ
Primary documents we read in full or in part: ICRA’s rationales of December 2024 and February 2026; the committee’s 117-page report (a scanned copy, read page by page; pages 93 to 102, 106 to 114 and 117 not read individually); Axiata’s release of 1 December 2023, its award release of June 2023, and its annual reports; the Nepal Telecom interim statement for the year to mid-July 2026. Court judgments and the arbitration award were not available to us; we rely on press and counsel for each and say so.
Calendar and fiscal years are never mixed: “year to mid-July 2025” is Nepal’s fiscal year 2081/82. Bikram Sambat dates are converted by anchoring on known pairs, such as 15 Mangsir 2080 = 1 December 2023. Derived figures (percentages, sums, ratios) are recomputed from the sources and marked as our calculation.
| Claim | Figure | Period | Sources | Status | Note |
|---|
| Licence expiry | 1 Sep 2029 (BS 2086/05/16) | Feb 2026 | 1,44 | Partially verified | ICRA and the regulator’s directive agree; ShareSansar printed 29 Aug 2029. We use 1 Sep 2029. |
| Revenue, year to mid-July 2025 | Rs 3,254.5 crore (audited) | Feb 2026 | 1 | Verified | ICRA’s key-indicator table, company data. Ncell’s own statements are not published. |
| Operating margin | 50% (ICRA basis) | Year to mid-July 2025 | 1 | Verified | Axiata quotes 57% to 58% on its definition; not mixed. |
| Shareholding | Reynolds 79.99%; Sunivera 19.99%; seven individuals 0.0011% | 2020 to 2026 | 3,1 | Verified | The committee’s table and ICRA agree. |
| 2016 price for Reynolds | USD 136.5 crore (Axiata, 2023); about USD 170 crore (Axiata filing quoted by the committee) | 2016 | 4,3 | Disputed | Telia’s own statements, converted by the committee, give about USD 159 crore. Sources differ; we show them side by side. |
| 2023 price | USD 5 crore fixed (USD 0.5 crore in six months, the rest after 48 months) plus a share of dividends to 2029 | 1 Dec 2023 | 4 | Verified | The dividend percentages come from the committee’s reading of the agreement, which is not public. |
| Capital gains tax paid on the 2016 sale | About Rs 4,700 crore, including fines and penalties | 2016 to 2020 | 4,1 | Verified | Axiata and ICRA agree. The court’s own figures (Rs 2,357 crore paid plus Rs 2,110 crore remaining) sum to Rs 4,467 crore; the rest is not explained. |
| Remaining tax after the November 2019 judgment | Rs 2,110 crore (myRepublica, Nepali Telecom); Rs 2,240 crore (The Himalayan Times) | Nov 2019 | 34,35,27 | Disputed | We use the full-text reports of the judgment; the other figure may include interest or fines. |
| Assessment of January 2021 | Rs 5,790 crore (Axiata, including interest to 13 Jan 2021); about Rs 6,000 crore reassessed, Rs 1,399 crore more than paid (The Himalayan Times) | Jan 2021 | 4,27 | Disputed | The two outlets describe different things. Collection is stayed; no final ruling found. |
| Supreme Court stay of the 2021 assessment | Interim order not to collect, 7 Feb 2021 | Feb 2021 | 28 | Verified | Single bench; one outlet reports it. |
| ICSID award | All claims dismissed on 9 Jun 2023; about USD 0.14 crore payable by Nepal | 9 Jun 2023 | 5,30 | Verified | Axiata and Nepal’s counsel agree on this much. We could not open the award. |
| Whether the award bars the 2021 assessment | Axiata: the tribunal said Nepal should refrain from enforcing it. Nepal’s counsel: silent | Jun and Dec 2023 | 5,4,30 | Disputed | Award not opened. Axiata itself says the assessment has not been withdrawn. |
| Regulator’s recognition of the 2023 transfer | Not recognised; Supreme Court left the decision to the regulator | Dec 2024 to Oct 2026 | 46,47,1 | Partially verified | Press and ICRA agree to Feb 2026; we searched to 23 Oct 2026 and found no recognition and no penalty. |
| Contingent liabilities | About Rs 8,600 crore at mid-July 2025, about 67% tax claims on the 2016 ownership change | Feb 2026 | 1 | Verified | The committee counts ten pending matters worth over Rs 8,500 crore. Not recognised as liabilities. |
| Dividends declared to Dec 2023 | Rs 9,350.8 crore; Rs 6,695 crore sent abroad | To Dec 2023 | 3,16,13 | Partially verified | The committee’s scanned text and a typed table; three outlets repeat it. |
| Dividends to the Nepali partners | Rs 1,925 crore, Rs 1,905 crore, Rs 1,995 crore or Rs 1,979 crore | To Dec 2023 | 3,16,15 | Disputed | Four figures from four readings of one table. We use none. |
| Foreign capital brought in | Rs 8.0 crore plus USD 0.96 crore (the committee’s typed table) | To Dec 2023 | 3,15 | Disputed | One English-language report prints this as Rs 800 crore. The typed table says Rs 8,01,60,792. |
| Payments to the state since 2001 | About Rs 30,200 crore (committee, to Dec 2023); Rs 28,300 crore to mid-2022 (Axiata); Rs 37,500 crore of “revenue” (Ncell, 2026) | Various | 3,4,48 | Disputed | Different definitions and dates; not reconciled. |
| Committee’s value of the company | Enterprise value Rs 14,800 to 18,000 crore | Jan 2024 | 3 | Verified | This is the committee’s estimate, not a market price or ours. It assumes continuity and no renewal fee. |
| Smart Telecom auction case | Charge sheet against 22 defendants; Rs 9,612 crore recovery sought; Ncell paid Rs 460 crore for the assets | 12 Aug 2026 | 37,38 | Partially verified | Reported by one outlet from the charge sheet and the investigators; the court has decided nothing. An allegation, not a finding. |
| Police investigation | Fraud, breach of trust and related allegations under investigation | Jul 2026 | 16,17 | Partially verified | A government progress document as two outlets report it. The charge sheet of 12 Aug 2026 (previous row) is the court filing found. |
| Supreme Court order on publication | Interim order of 14 Aug 2026 not to implement the decision to publish | Aug 2026 | 51 | Partially verified | One outlet; the report was already posted. |
| Renewal fee | Rs 2,000 crore in instalments, 10% interest | Aug and Sep 2024 | 41,42 | Partially verified | Reports of the instalment schedule differ. |
| Voice SIM share | Ncell 46.5%, Nepal Telecom 53.5% | Mid-2026 | 55 | Partially verified | The regulator’s own page was not reachable from our network. |
| Axiata’s 2025 annual report | No mention of Ncell or Nepal found | 2025 | 12 | Partially verified | We searched the report’s text for both words and found neither; this is a report of an absence, not a statement about what the report omits. |
| Item | Source A | Source B | How we treat it |
|---|
| 2016 price | Axiata (2023): USD 136.5 crore | Axiata filing quoted by the committee: about USD 170 crore | Both shown; we use neither as a base |
| 2021 assessment | Axiata: Rs 5,790 crore including interest and penalties | The Himalayan Times: about Rs 6,000 crore reassessed, Rs 1,399 crore more than paid | Different things; both shown |
| Second payment, June 2017 | The Kathmandu Post and myRepublica (Nov 2019): Rs 1,360 crore, on 4 Jun 2017 | An earlier myRepublica report: Rs 1,157 crore | We use Rs 1,360 crore, supported by two reports |
| Remaining tax after Nov 2019 | myRepublica and Nepali Telecom: Rs 2,110 crore | The Himalayan Times: Rs 2,240 crore | We use Rs 2,110 crore; the other may include interest or fines |
| Incorporation of the company | ICRA: 2001; committee: BS 2058 | One outlet: registered on 1 Sep 2004 (the licence date) | We use 2001 for incorporation, 2004 for the licence and 2005 for service |
| Dividends to Nepali partners | Rs 1,925 crore (Gorkhapatra, Kantipur) | Rs 1,905 crore, Rs 1,995 crore, Rs 1,979 crore (other readings) | None used |
| Foreign capital brought in | Typed table: Rs 8.0 crore plus USD 0.96 crore | English report: Rs 800 crore | We use the typed table |
| Date the committee was formed | Cabinet decision of 7 Dec 2023 | Himalaya Times: “21 Poush 2080” | We use 7 Dec 2023, which two outlets and the report support |
| Licence expiry | ICRA: 1 Sep 2029 | ShareSansar: 29 Aug 2029 | We use 1 Sep 2029 |
| Renewal-fee schedule | Four instalments of Rs 500 crore (one report) | Rs 400 crore then Rs 1,600 crore, or Rs 100 crore then three of Rs 500 crore (others) | Total Rs 2,000 crore only |
| Payments to the state | Committee: about Rs 30,200 crore to Dec 2023 | Axiata: Rs 28,300 crore to mid-2022; Ncell: Rs 37,500 crore (2026) | Not reconciled |
Where two sources differ we show both and say which we use. 4,3,27,31,24,16,15,1,41,42,48
| What we could not establish | Why it matters | Next step |
|---|
| Audited financial statements, cash flow, capital spending, tax paid and profit after 2023 | They decide how much cash the business makes | Ask the company or the regulator; read a prospectus if one is issued |
| The 2023 agreement | Terms other than the fixed price are second-hand | Obtain the filed copy |
| The ICSID award | Decides whether Nepal may enforce the 2021 assessment | Open it from the centre’s case page |
| The Supreme Court’s written judgments | We rely on press reports of each | Read the full texts |
| Section 33 of the Act, official text | Quoted via the committee and press | Read the official text |
| The regulator’s survey of subscribers | The page was unreachable from our network | Read it directly |
| Committee report pages 93 to 102, 106 to 114 and 117 | Not read individually | Read in full |
| Ncell’s response to the Smart Telecom charge sheet, and the court record of that case | We rely on press accounts of the charge sheet | Read the charge sheet and Ncell’s statement |
| The 2100 MHz frequency-fee arrears | The first digit of the amount is lost in the scan | Obtain a clean copy |
Searched in English and Nepali, to 23 Oct 2026, for company statements, a recognition decision, an assessment on the 2023 change, a ruling on the 2021 writ and any later Supreme Court order declaring the 2023 agreement invalid; we found none. The court’s published decision of Dec 2024 neither cancelled nor validated the sale. The Smart Telecom charge sheet of 12 Aug 2026 is in the register. 3,5,29,46,37
| Reading | For | Against | Where it stands |
|---|
| A profitable utility-like operator | Margin of about 50% and low debt | Revenue down 45% from 2018; market share down 13 points | True until 2029, if the licence runs to expiry |
| An asset about to vest in the state | Section 33; regulator’s handover direction; committee recommendation | Ncell has the right to re-bid or renew; the Tenth Amendment provides for re-issue | Depends on foreign ownership and policy |
| A governance case | Unrecognised owner; 14 transfers; police inquiry; committee findings | No court has found wrongdoing; owners deny it | Allegations, not findings |
| A tax case | Court-found liability in 2019; stayed Rs 5,790 crore claim | ICSID award; Axiata’s account of the April 2020 confirmation | Pending |
Our view: the first reading is accurate for the next three years, and the third and fourth are unresolved. 1,3,46,4
| Term | What it means here |
|---|
| GSM revenue share | Ncell’s share of the revenue of the two GSM operators, as ICRA estimates it. |
| OPBDITA | Operating profit before depreciation, interest, tax and amortisation, on ICRA’s definition. |
| Section 57 | The Income Tax Act provision that treats a change of 50% or more of the underlying ownership of an entity as a disposal of its assets. |
| Section 33 | The Telecommunications Act provision on assets of a licensee with more than 50% foreign investment when the licence expires. |
| ICSID | The World Bank’s centre for settling investment disputes between investors and states. |
| Contingent liability | A possible obligation that depends on a future event, such as a tax assessment being upheld; disclosed but not recorded. |
| Stay | A court order that suspends collection while a case is decided. |
| Crore, lakh | 1 crore = 100 lakh = 1,00,00,000. Foreign amounts are also in crore of that currency. |
What does this file establish, and what does it leave open?
16. What this establishes, and what it does not
- Ncell is a private mobile operator with a licence that ends on 1 Sep 2029 and revenue of Rs 3,254 crore, down 45% from its peak.
- It has paid about Rs 4,700 crore of capital gains tax on the 2016 sale of its parent and faces a stayed assessment of Rs 5,790 crore on the same transaction.
- Its 80% owner changed on paper on 1 Dec 2023 for USD 5 crore fixed, and the regulator has not recognised the sale.
- A government committee valued the company at Rs 14,800 to 18,000 crore; our valuation, which weighs the licence outcome, is far lower, and we show why.
- A separate criminal case over Ncell’s purchase of Smart Telecom’s assets is pending against 22 defendants; it is an allegation, not a finding.
- The decisive documents are not public: the audited accounts, the 2023 agreement, the arbitration award and the regulator’s file.
Two sales. Two tax bills. One date.
When a licence ends in three years and the owner is unrecognised, what are you valuing: the network, the licence or the lawsuits?
Which unlisted company with a public problem deserves the next KYC?
Sources & further reading
Primary sources
- Ncell Axiata Limited: ratings reaffirmed (key financial indicators for the years to mid-July 2022 to 2025 and the first quarter to mid-October 2025). ICRA Nepal, 5 Feb 2026.
- Ncell Axiata Limited: ratings reaffirmed. ICRA Nepal, 31 Dec 2024.
- Report of the Study and Investigation Committee on the Purchase and Sale of Shares of Ncell Axiata, 2080 BS (117 pages). Government of Nepal, study and investigation committee, 29 Jan 2024; posted 12 Aug 2026.
- Axiata concludes sale of Ncell, exits Nepal. Axiata Group Berhad, 1 Dec 2023.
- Axiata, Ncell confirms receipt of ICSID’s arbitration award. Axiata Group Berhad, 12 Jun 2023.
- Ncell announces sale transaction. Ncell Axiata Limited, 1 Dec 2023.
- Credible performance in challenging year (2020 results). Axiata Group Berhad, 2021.
- Financial year 2021: strong growth supported by robust data demand and digitalisation. Axiata Group Berhad, 2022.
- On track in meeting strategic objectives in 2022 (full-year results). Axiata Group Berhad, 2023.
- Interim financial statements as at Ashadh 2083 (condensed consolidated; unaudited). Nepal Doorsanchar Company Limited, 16 Jul 2026.
- Nepal Doorsanchar Company (NTC): price, shares, EPS, book value. Merolagani (NEPSE data), 23 Oct 2026.
- Integrated Annual Report 2025. Axiata Group Berhad, 2026.
Secondary sources
- Ncell share purchase and sale investigation report made public (full text, in Nepali). Gorkhapatra, 12 Aug 2026.
- Everything you need to know about the Ncell probe report. Nepal News, Aug 2026.
- Government to make Ncell share transaction investigation report public. Nepali Telecom, 12 Aug 2026.
- Government report raises serious concerns over Ncell’s financial practices, ownership transfer. Himalaya Times, Jul 2026.
- Government to implement investigation committee’s report on Ncell share purchase. Nepali Telecom, Jul 2026.
- House panel orders halt to Axiata’s Ncell sale process. The Kathmandu Post, 7 Dec 2023.
- Government to implement investigation report on Axiata deal. Nepali Telecom, Feb 2024.
- Ownership transfer to prevent Ncell from going under govt control. Himal Press, Dec 2023.
- Ncell lists facts regarding the Axiata-Spectrlite UK stake deal. Nepali Telecom, Dec 2023.
- Patan High Court interim orders on registration of traded Ncell shares. Setopati, 7 and 11 Dec 2023.
- Supreme Court orders Axiata and Ncell to bear the capital gains tax bill (report of the judgment). The Himalayan Times, 7 Feb 2019.
- Full text of the Supreme Court judgment: Ncell given three months to pay the tax. myRepublica, 10 Apr 2019.
- Ncell ruling opens a can of worms. Nepali Times, 2019.
- Understanding Ncell arbitration. Business 360, 2019.
- Large Taxpayers’ Office reassesses Ncell’s capital gains tax liability (January 2021). The Himalayan Times, 2021.
- SC tells LTO not to collect tax from Ncell. The Himalayan Times, 8 Feb 2021.
- Supreme Court to examine ICSID decision in Ncell tax dispute. OnlineKhabar English, undated.
- Foley Hoag helps secure Nepal’s victory in its first investment arbitration case. Foley Hoag LLP, Jun 2023.
- Ncell gets green light to repatriate dividends. The Kathmandu Post, 11 Jan 2018.
- Axiata to acquire 80% stake in Ncell (December 2015 announcement). Telecompaper, 22 Dec 2015.
- Supreme Court full text on Ncell’s second writ: the remaining capital gains tax liability. myRepublica, 22 Nov 2019.
- Supreme Court directs Ncell to pay the remaining capital gains tax. Nepali Telecom, Nov 2019.
- Ncell deposits a first instalment of the remaining capital gains tax. OnlineKhabar English, Dec 2019.
- The Ncell and Smart Telecom case: 22 defendants and a recovery claim. Nepal News, Aug 2026.
- Ncell under investigation in the Smart Telecom auction case. Nepal News, 2026.
- A timeline of deals and a disputed auction. Nepal News, 2026.
- Questions raised over the committee’s share investigation report. Fiscal Nepal, 15 Oct 2026.
- Government renews Ncell’s licence on an instalment plan for the renewal fee. ShareSansar, 30 Aug 2024.
- NTA renews Ncell’s licence for five years after the first payment. ShareSansar, 3 Sep 2024.
- Publication of Tenth Amendment to the Telecommunication Regulations, 2054. Pradhan & Associates, 9 Dec 2024.
- Ncell at the crossroads: Nepal’s telecom policy raises fresh questions over investment, renewal and 5G. Fiscal Nepal, 2 Oct 2026.
- Smart Telecom asset dispute. OnlineKhabar English, 20 Aug 2026.
- Supreme Court orders NTA to regulate Ncell’s 80% share transfer. Khabarhub, Jul 2026.
- Supreme Court clears way for Ncell ownership transfer via NTA. Nepali Telecom, 22 Jul 2026.
- Ncell urges government to review share ownership dispute. Khabarhub, Jul 2026.
- Ncell appeals to the Prime Minister to review ownership dispute. Nepali Telecom, Jul 2026.
- Ncell seeks government resolution on licence renewal, commits to issue IPO. Nepali Telecom, 8 Jan 2026.
- SC issues interim order: Ncell’s share sale investigation report should not be made public. Nepali Telecom, Aug 2026.
- Ncell’s payments of taxes and fees in the year to mid-July 2026 (company statement). Nepali Telecom, Sep 2026.
- Nine-month income and payments to the state (in Nepali). Annapurna Post, Jun 2026.
- Ncell quarterly revenue and EBITDA reports (Q4 2021 to Q2 2023). Nepali Telecom, 2022 to 2023.
- Total telephone subscriptions in Nepal reach 3.03 crore. Himal Press, 2026.
- ICRA Nepal rates Ncell’s long-term and short-term loans. ShareSansar, 21 Aug 2022.
- Axiata posts RM576m losses in 2Q on Ncell write-off. The Edge Malaysia, 29 Aug 2023.
- Ncell appoints a new chief executive, effective 1 Nov 2025. Business 360, Oct 2025.
- Ncell ordered to refund customers in auto-renewal case; Ncell to contest NTA’s verdict. Nepali Telecom, Aug and Sep 2021.
Historical sources
- TeliaSonera buys Asian operators (September 2008 announcement). Scandasia, Sep 2008.
Checked 23 October 2026. Educational research, not investment advice.