DoT asks four telecom operators to give accounting info to CAG

The Department of Telecommunications (DoT) has directed telecom operators — Bharti Airtel, Reliance Communications, Vodafone Essar and Tata Teleservices — to provide accounting details for three years from 2006-07 to the Comptroller and Auditor General of India (CAG) in the next 15 days. CAG, the apex audit body, earlier decided to audit accounts of leading telecom operators.

DoT, in its 11 March communication, asked the operators to provide details on the accounts, which include total cost and breakup of original and current cost, breakup of operational expenses, total income from other sources amongst others.

Tata Teleservices confirmed the development. “Yes, we have received the letter which has been sent to other operators as well. We will provide the required information when they seek and cooperate with the auditor,” a company spokesperson said. Other telecom operators declined to comment.

The move comes close on the heels of DoT’s decision last year under which it ordered an independent special audit of five companies — Bharti Airtel, RCom, Vodafone Essar, Idea Cellular and Tata Teleservices — to look into the alleged evasion of licence fees to the government. The audit reports on RCom and Bharti have already been submitted, while the reports for the rest are awaited this month.

DoT’s action came after the telecom regulator, Trai, found a jump in revenues in the long distance segment.

The special auditors of Bharti Airtel quantified an amount of Rs 174 crore, which the company may have to pay to the government as licence fee according to the terms of reference of DoT. However, Bharti Airtel said that it was not liable to pay any licence fee.

The first audit on RCom, submitted in October 2009, said the company was sending inflated data on revenues to shareholders, while showing much lower figures to Trai, thus underpaying licence fees. Auditors Parakh & Co said that during 2007-08, RCom’s actual wireless revenue was Rs 12,298 crore, but it inflated the figure by 23 per cent to Rs 15,213 crore while reporting performance to shareholders, leaving a gap of Rs 2,915 crore.

For the same year, the company under-reported its revenues to Trai, as a result of which it allegedly evaded licence fees and spectrum charges worth Rs 224.79 crore. RCom, however, denied all these allegations.