Axiata Group Berhad, a Malaysian multinational telecommunications conglomerate, has announced its decision to exit Nepal’s telecommunications market. The company, which holds an 80% stake in Ncell, one of Nepal’s largest mobile operators, has cited a challenging business environment and declining returns as reasons for its departure.
The decision to exit Nepal comes amidst a backdrop of increasing competition in the country’s telecommunications sector. In recent years, several new players have entered the market, leading to a price war and putting pressure on profit margins. Additionally, the economic outlook in Nepal has been uncertain, making it difficult for businesses to operate profitably.
Axiata’s decision is also likely to be influenced by the ongoing capital gains tax dispute with the Nepalese government. The company had been embroiled in a tax dispute with the government over the sale of its shares in Ncell. While the issue was eventually resolved, it is believed to have soured Axiata’s relationship with the Nepalese government.
Impact on Nepal’s Telecommunications Market
Axiata’s departure from Nepal’s telecommunications market is likely to have a significant impact on the sector. The company’s exit could lead to a consolidation of the market, with the remaining players vying for a larger share of the market. It is also possible that new players could enter the market, taking advantage of Axiata’s exit.
The departure of Axiata could also have implications for Ncell’s employees. The company may be forced to downsize its workforce as a result of the exit. Additionally, the company’s future investment plans in Nepal are likely to be scaled back.
The Future of Nepal’s Telecommunications Market
Despite Axiata’s exit, the future of Nepal’s telecommunications market remains positive. The country’s mobile penetration rate is still low, and there is a growing demand for telecommunications services. Additionally, the government is committed to expanding connectivity to rural areas.
The telecommunications sector is expected to play a key role in Nepal’s economic development. The sector can help to create jobs, increase productivity, and improve access to information and services.
As Nepal’s telecommunications market continues to evolve, it is important to ensure that the sector remains competitive and that consumers have access to affordable and high-quality services. The government can play a role in ensuring a level playing field for all operators and in protecting consumer rights.
Axiata Group Berhad’s decision to exit Nepal’s telecommunications market is a significant development. The company’s departure could have a major impact on the sector, but there are also reasons to be optimistic about the future of Nepal’s telecommunications market. The sector is expected to play a key role in Nepal’s economic development, and the government is committed to expanding connectivity to rural areas.