A critical technological upgrade for Nepal Telecom (NT), the backbone of the nation’s communication infrastructure, has been halted indefinitely, raising significant concerns about the organization’s long-term financial health and its role in achieving the ‘Digital Nepal’ vision. The procurement process for a sophisticated new billing and customer support system, intended to replace an aging, 14-year-old platform, was paused by a political directive just as it was reaching its final, crucial stage: the opening of the financial bids of the technically selected company.

This sudden intervention, coinciding with a transition in government, has reignited a pervasive debate regarding the stability of major public sector projects in Nepal. Analysts caution that politicization of purely technical and legally mandated processes not only undermines the nation’s largest public telecommunications company but also sends a detrimental signal to international investment communities considering major technology collaborations in the country.

The Critical Need for Modernization and the Risk to National Service

The need for a new billing system at Nepal Telecom is not a matter of choice but an operational imperative. Since 2011, NT has relied on software provided by a single international vendor, Asia Info. While the original intention for such systems involves periodic upgrades and replacements, the contract has been continuously extended for 14 years, a duration widely deemed excessive under public procurement norms.

This prolonged reliance on outdated technology has resulted in significant operational weaknesses, including a documented annual revenue leakage that has been estimated at up to 14%. For a state-owned entity with a mandate for national service, this represents a major economic drain. Past government bodies and internal reviews had consistently urged NT to transition to a modern, real-time solution to plug these financial gaps and stabilize service delivery.

The Looming Deadline

The situation carries an urgent timeline. The contract for the current, aging system expires in September 2027. Legal and procedural constraints strictly prohibit any further extensions beyond this date. Industry experts have issued stark warnings that without a new system fully installed, tested, and operational before that deadline, Nepal Telecom risks a comprehensive service shutdown. Given the extensive time required for tender finalization, system implementation, customization, data migration, and testing - a process that typically spans 18 to 24 months - any significant delay now translates into a palpable threat to the continuity of the entire national telecom service.

Rigor and Compliance: The Vetted Procurement Process

The current procurement effort, launched in March 2025 following the cancellation of an earlier tender that attracted only a single bidder, was characterized by rigorous adherence to national and international standards. This meticulous approach was designed to circumvent the very controversies now plaguing the project.

Consultations and Documentation

The bid document itself, a voluminous compilation exceeding 400 pages, was developed in close consultation with statutory bodies, including the Public Procurement Monitoring Office (PPMO) and the Commission for the Investigation of Abuse of Authority (CIAA). This ensured the specifications, evaluation criteria, and tender process were robustly compliant with Nepal’s Public Procurement Act and international best practices, thereby minimizing the scope for legal challenge on procedural grounds.

Central to the document’s integrity was its strict technical mandate, which demanded compliance with globally reputed service standards. Specifically, the offered Authentication, Authorization, and Accounting (AAA) system was required to be compliant with:

3GPP Online Charging System (OCS): This standard ensures real-time credit control and charging, a crucial feature for minimizing revenue loss and enabling flexible, modern prepaid and hybrid service models.

3GPP Offline Charging System (OFCS): This standard governs the collection of usage data for subsequent processing and postpaid billing, ensuring comprehensive financial records.

The document further stipulated that crucial operational features, such as the billing bypass mode, failover, and maintenance scenarios, must be implemented using standard 3GPP functions with automatic correction mechanisms for online and offline charging records. This level of technical specification underscores that the entire tender was built on a framework of security, reliability, and international interoperability, rather than proprietary vendor specifications.

The Technical Outcome

Two companies, Huawei and Whale Cloud, participated in the re-invited tender. Following a rigorous three-month technical evaluation that adhered strictly to public procurement law, the Tender Evaluation Committee declared Huawei as the sole technically successful bidder. The other competitor, Whale Cloud, was eliminated at this stage, primarily due to the tender’s non-negotiable clause intended to prevent conflicts of interest (as Whale Cloud had previously supplied a billing system to NT’s competitor).

Having passed all technical, security, and compliance checks, Huawei was the only remaining company eligible for the final step: the opening of its financial proposal. This phase, according to procurement law, should have proceeded as a matter of routine to determine the most economically advantageous offer.

The Inconsistency of Intervention: Process vs. Pressure

The process, having successfully navigated technical evaluations and legal requirements, came to an unexpected halt when the deadline for opening the financial proposal was nearing. The Minister of Communication and Information Technology Jagadesh Kharel issued an instruction to Nepal Telecom to suspend the financial opening until further notice.

This intervention, coming at the final minute of a legally vetted process where only one technically qualified bidder remained, suggests that the project has fallen victim to a persistent challenge in Nepal’s public sector: the powerful influence of external lobbying, media politics, and non-political vested interest groups seeking to derail a process that was not favorable to their side.

The action is particularly confounding given the composition of the decision-making framework. The key institutional figures overseeing the process - including the Nepal Telecom Board Chairman, who is the Secretary of the Ministry of Communications and Information Technology (MoCIT), and the core Nepal Telecom technical team responsible for preparing and evaluating the bids - remained consistent throughout the tender period.

The sudden freezing of a legally progressing tender, immediately following a change in political leadership but primarily attributed to external pressure, suggests that the project has fallen victim to the perennial challenge facing Nepal’s public sector: the vulnerability of long-term strategic decisions to short-term political flux and the demands of powerful middlemen.

The Role of Non-Statutory Committees

Further complicating the matter was the formation of a seven-member study committee by the Minister to “examine the controversy.” While the stated intent was to study the project, telecom experts point out that this committee lacks any legal standing or recognition under the bylaws of Nepal Telecom or the Nepal Telecommunications Authority. Consequently, any findings produced by this body are non-binding on the ongoing, legally mandated procurement process. The creation of such an extra-statutory body is perceived by some as a tactic to introduce unnecessary delay and sidestep responsibility for a timely, executive decision on a technically vetted matter. Ministry sources have, however, maintained that the committee’s role is purely advisory and will not interfere with the tender’s legal progression, though the suspension order itself contradicts this assurance.

Global Precedents and the Technical Reality

The public discourse surrounding the tender has often centered on the technical suitability of the vendor. One frequently raised objection - magnified by external actors and media - is the concern that the same vendor should not supply both the core network infrastructure and the billing system.

However, a review of global telecom practices reveals a different reality. Across the world, multiple Tier 1 telecom companies - the largest and most advanced operators - routinely utilize a single vendor for both their core network and their business support systems (BSS), which includes billing. This integrated approach is often driven by the technical requirement for deep, seamless interoperability between the network elements (which process the calls and data) and the charging system (which calculates the cost). The 3GPP standards, which govern OCS and OFCS, are designed to allow for this integration, ensuring that critical functions like failover and real-time charging can operate with maximum reliability.

Experts argue that technical decisions of this nature should be confined to the domain of qualified engineers and the established Tender Evaluation Committee, whose expertise is specifically constituted to assess these complex requirements. Elevating such specialized technical specifications into public political disputes is counterproductive, serving only to generate unnecessary friction and distract from the central goal of institutional modernization.

The Cost of Cancellation: Impact on Economy and Confidence

The potential fallout from cancelling the current billing tender for a second time would extend far beyond Nepal Telecom itself.

1. Financial and Operational Loss: A cancelled tender would force NT to restart the multi-year, multi-million dollar procurement cycle from the beginning. This not only incurs sunk costs from the already completed evaluation process but also pushes the mandatory system replacement dangerously close to the September 2027 deadline. Every day of delay means continued revenue leakage under the outdated system, translating into millions in lost state revenue annually.

2. Damage to Investment Confidence: The repeated stalling of high-value, high-visibility technology contracts due to governmental changes and external political pressure severely damages the confidence of reputable international technology providers. When a process that adheres rigorously to national procurement laws is arbitrarily frozen by non-technical authority, it creates an environment of uncertainty, discouraging global bidders from participating in future public sector tenders in Nepal. This directly undermines the ‘Digital Nepal’ vision, which relies heavily on attracting sophisticated international technology to build resilient digital infrastructure.

3. Hindering the Digital Vision: Nepal Telecom is positioned as a primary catalyst for the nation’s digital transformation. A modern, robust billing system is foundational - it enables the agile deployment of 5G services, supports new Internet of Things (IoT) applications, and allows for the introduction of innovative, tailored digital services essential for economic growth. By delaying this core component, the nation collectively postpones its digital future, hindering its ability to compete in the regional digital economy.

In essence, the current impasse surrounding Nepal Telecom’s billing system highlights a persistent institutional flaw: the vulnerability of technical progress to political interference and non-technical commentary. For Nepal Telecom to secure its future, stabilize its finances, and successfully fulfill its role as a key state asset, there is an urgent need for institutional stability and a firm commitment to allowing legally sound technical processes to proceed to their logical conclusion, shielding them from the transient demands of the political cycle and external influences. The path forward demands prioritizing the long-term integrity and operational survival of the nation’s telecom backbone over short-term political pressures.