Nepal Telecom has cancelled the tender for its new billing system, scrapping the controversial procurement process for the supply, delivery, and installation of a real-time billing and customer support system worth around Rs 5.5 billion.

Issuing a notice, Nepal Telecom stated that its board meeting held on Friday decided to cancel the tender process altogether.

Nepal Telecom has been facing recurring disruptions in data and postpaid mobile services due to problems in its existing billing system. The current system, supplied by Chinese company AsiaInfo, has repeatedly malfunctioned, leading to frequent service outages. Efforts to replace this outdated system had also become contentious, preventing the tender process from moving forward.

Earlier, then Minister for Communications and Information Technology Jagdish Kharel had directed Nepal Telecom to halt the tender process a day before the technical proposals were scheduled to be opened. According to sources, the minister, who resigned on Monday to contest the upcoming election, ordered the suspension citing concerns that opening the technical bids amid controversy could create further complications.

While Nepal Telecom had initially issued and then suspended the tender notice, it has now formally cancelled the entire procurement process. Sources say the minister had instructed the temporary suspension due to potential geopolitical complications associated with awarding the contract to a Chinese company.

The United States Embassy has reportedly expressed serious concerns over Nepal Telecom’s core network and billing systems being operated by Chinese firms. Since the launch of mobile services, Chinese companies’ presence within Nepal Telecom has increased, with access to most of its information systems. The U.S. side has been pressuring Nepal Telecom to bring in a different company for the billing system.

However, after the billing contract value was set at around Rs 5.5 billion, no American companies submitted bids. Subsequently, two Chinese firms - Whale Cloud and Huawei - participated in the tender. Nepal Telecom was preparing to shortlist Huawei based on technical evaluation, but the process could not proceed further due to the suspension and eventual cancellation.