Huawei, the main contractor for the 19-billion-rupee project, was supposed to be blacklisted under the Public Procurement Act for failing to meet contract terms. Instead, political protection allowed the company not only to avoid penalties but also to secure billing rights.
The project has suffered from poor quality and mounting costs. Nepal Telecom continues to pay mandatory regulatory fees while customers face weak service. The company has been paying more than 100 million rupees annually for unused WiMAX frequency, held for small cell equipment that Huawei never installed.
Huawei’s partner company, CCSI, was contracted to install about 6,000 small cell units. These devices are critical for boosting 4G and 5G coverage, especially in underground areas and building interiors. The company failed to deliver equipment worth 700 million rupees, leaving service quality compromised.
Despite clear contract terms, Nepal Telecom did not blacklist Huawei or demand compensation. Under the law, Huawei should have paid 600,000 rupees per day in damages for the past three years. Instead, former managing directors Sangeeta Pahadi and Sabina Maskey cleared the project without enforcing penalties.
Political backing from then-Prime Minister KP Sharma Oli and Communications Minister Prithvi Subba Gurung shielded Huawei. The first tender was canceled and reissued, ultimately favoring Huawei. If Huawei gains control of billing, experts warn that Nepal Telecom’s core technology will fall under Huawei’s influence, raising strategic risks.
The Commission for the Investigation of Abuse of Authority (CIAA) is now probing the matter. Complaints have also been filed over antennas supplied outside contract terms. Huawei used Chinese-made antennas instead of equipment from the US, Canada, Europe, Finland, or Australia, as specified in the agreement.
Nepal Telecom first launched 4G service in Kathmandu Valley and Pokhara in 2017. Two years later, the company began nationwide expansion. The contract awarded CCSI 17 billion rupees for radio equipment, towers, and transmission, while ZTE received 2 billion rupees for core network supply. ZTE completed its work on time. Huawei, however, delayed installations, citing COVID-19, and delivered substandard equipment.
The CIAA continues to investigate the rising costs and questionable procurement practices tied to the project.
