DoT appoints auditors to study telcos' books

Acting on the Telecom Regulatory Authority of India’s (Trai’s) advice, the Department of Telecommunications (DoT) has shortlisted auditors to look into the accounting practices of major telecom companies including Bharti Airtel, Vodfone-Essar, Tata Teleservices and Idea Cellular.

According to sources close to the development, Contractor, Nayak and Kishnadwala; Chhajed and Doshi; and SK Mehta and Company are among the audit firms shortlisted to scrutinise the accounts.

The account books of these telecom companies had come under a cloud after it was alleged that many of them had not been paying the government the required share of their earnings as licence fee by showing the revenue earned under other categories.

The auditors will assess whether the companies have paid spectrum charges that are due to the government for fiscal years 2007-08 and 2008-09. The auditors will also conduct a special audit on the audited revised statements of the revenue and licence fee which was submitted by the companies to the Wireless Planning Finance (WPF) Branch and compare it with the one submitted earlier to the Licensing Finance (LF) Branch.

The role and responsibility of the statutory auditors will also be looked into in case of any discrepancy in the accounts.

The move comes after the Trai recommendations to look into the books of Bharti Airtel to verify the reporting of its revenue from the long distance telephony segment.

Last year, the DoT had ordered a special audit of the books of Reliance Communications following same charges.

Under the country’s telecom policy, all telecom companies have to pay to the government 6 per cent to 10 per cent of their annual revenues as licence fee and another 2 per cent to 6 per cent of their annual revenues as spectrum charge. Both these components are not applicable to internet service providers.

The telecom companies in question, however, said since there had been no official communication on the matter, they would not comment on the matter.