Himal Press 
KATHMANDU: Stakeholders have emphasized the need to allocate royalties generated from the use of telecommunications frequencies to provincial and local governments.
Speaking at a program organized by the Society of Economic Journalists-Nepal (SEJON) on Monday, they argued that since telecommunications frequency royalties are derived from natural resources, they should be distributed accordingly.
Juddha Gurung, a member of the National Natural Resources and Fiscal Commission (NNRFC) said that they had recommended to the Ministry of Finance to establish a divisible fund and distribute the royalties two years ago. “However, the ministry has not initiated any work in this direction,” he added. “Since various international practices and Nepal’s policy frameworks have clearly established that telecommunications royalties are derived from natural resources, they should be distributed to subnational governments.”
Engineers Khimananda Kandel and Bhuvan Paudel, who conducted the study on behalf of the NNRFC, also confirmed that the royalties are derived from natural resources. “Article 69(4) of the Constitution of Nepal, and Schedules 6 and 9 of the Intergovernmental Fiscal Management Act, 2017, classifies telecommunications royalties as natural resources,” Kandel said. “A Supreme Court decision in 2013 also interpreted them as natural resources.”
Paudel added that telecommunications frequencies are naturally available resources. “Wireless technologies such as radio, TV, X-rays, phones, and mobiles operate using radio frequencies,” he explained. “While other sectors generate minimal revenue from radio frequencies, telecommunications generate the highest revenue from them.”
Also speaking on the occasion, Vice-Chairperson of the National Planning Commission (NPC), Prof Dr Shivraj Adhikari said there is a need to clarify whether the royalty distribution is a dividend or compensation. “While distributing royalties, it is essential to study the impacts of radio frequencies,” he added.
Similarly, Kiran Raj Sharma, secretary of the NNRFC said they have recommended to the finance ministry to distribute the royalties based on the impact, conservation and utilization of radio frequencies. “Policy frameworks have established mechanisms for equitable distribution of natural resources,” Sharma said. “The recommendation is to distribute them based on factors such as area, population, and mobile users.”
The commission has recommended allocating 30% based on geography, 25% on population, 15% on mobile users and 30% on Basic Transceiver Stations (BTS).
The Nepal Telecommunications Authority collects an average of Rs 3.5 billion annually in royalties. More than 90% of this amount comes from two GSM operators – Nepal Telecom and NCell.
