Malaysian telecommunications giant Axiata Group has decided to conclude its seven-year investment in Nepali telecom company Ncell. In a statement on Wednesday, Axiata announced its decision to divest its 80% stake in Ncell, citing a sustained decline in profitability.
Axiata initially entered the Nepali market in 2072 BS (2015 AD) by acquiring an 80% stake in Ncell from TeliaSonera. It enjoyed strong profits in the early years. However, Axiata has faced a downward trend in Ncell’s financial performance recently.
As per Nepal Telecommunication Authority’s report for the third quarter of the last fiscal year, Ncell’s customer base dropped noticeably from 3.4 million in 2079 BS to 2.32 million in mid-2080 BS – reflecting a loss of over 200,000 customers in just three months.
“The outlook in Nepal is increasingly challenging, thus the Board has decided to exit Nepal and accordingly reclassify Ncell as asset held for sale,” Axiata said in its statement.
The remaining 20% stake in Ncell is held by Sunivera Capital Ventures, owned by businessmen of Nepali origin.
Axiata’s entry into Nepal in 2072 BS marked its expansion across six Asian countries. The group has telecom operations across Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia. Its Nepal exit points to dimming prospects in South Asia’s smallest economy.