In a significant development, Malaysian telecommunications giant Axiata Group Berhad has officially confirmed its exit from the Nepalese market. The decision follows the announcement of an unconditional sale and purchase agreement with Spectrlite UK Limited for the divestment of Reynolds Holding Limited, the entity holding an approximately 80 percent equity stake in Ncell Axiata Limited.
Axiata is set to sell Ncell for a fixed consideration of $50 million. The company cited “unfair taxation and regulatory uncertainties” as the primary reasons for its departure from Nepal. Axiata emphasized that the current business environment in the country is no longer sustainable, leading to the conclusion that continuing operations in Nepal is untenable.
Vivek Sood, Group Chief Executive Officer and Managing Director of Axiata, expressed the challenges faced by the company in Nepal, stating, “Axiata has been in Nepal for seven years, working alongside hard-working colleagues in Ncell. However, the increasing challenges in the operating environment represent a fundamental shift.”
The decision to exit Nepal is attributed to unfavorable conditions for Axiata, coupled with uncertainties in the regulatory and tax landscape. Additionally, the impending risks associated with the expiration of the mobile license in 2029 played a pivotal role in the strategic move.
Axiata had acquired a controlling stake in Ncell in 2016 through the purchase of Telia-owned Reynolds Holding for $1.37 billion. Despite the acquisition, the company faced a financial setback when Nepalese authorities demanded an additional $433.6 million in January 2021, following a reassessment. The payment was subsequently suspended after an international tribunal intervened, preventing authorities from seeking further financial obligations from Ncell.
This development marks the end of Axiata’s seven-year presence in Nepal, highlighting the challenges faced by multinational corporations operating in emerging markets with evolving regulatory landscapes.