Although the government has allowed Indian joint venture UTL to resume its wireless phone service to re-registered customers, it hasn't allowed it to add any more customers. This has drawn flak from the Indian Embassy in Kathmandu which this week expressed concern over the telecom tie-up. The embassy said the impasse could erode foreign investors' confidence and undermine India-Nepal economic ties. United Telecom (UTL) is a joint venture between MTNL and VSNL and Nepali partners with Rs 3 billion invested in Nepal.

"We trust that UTL will be allowed to operate in an unfettered manner in accordance with the terms of its licence," the embassy statement added. Government officials have said UTL is not being singled out and Nepal Telecom's own mobile service have not yet been resumed. Army officials say privately they have evidence that the Maoists have used the cellular and wireless phone networks to plan and coordinate attacks in the capital and elsewhere.