Trai asks DoT to examine Airtel's inter-segment revenue

Citing irregularity in reporting of revenues, the Telecom Regulatory Authority of India (Trai) has asked the Department of Telecommunications (DoT) to examine GSM major Bharti Airtel’s inter-segment revenues.

“...it has been noted that there is a shift in revenues to the long-distance segment, which attracts (a levy of) only 6 per cent of the licence fee as against 6-10 per cent in case of Universal Access Service Licence and Cellular Mobile Telephone Services,” Trai said in a letter to DoT.

“The changes in the inter-segment revenues are brought to your notice for further action/examination as deemed fit. Views/action taken on the matter may also be conveyed to Trai,” it added.

This means Bharti Airtel has been allegedly saving on its net outgo to the government by attributing higher revenues to its long-distance licence.

A Bharti Airtel spokesperson said: “As a responsible corporate following the highest standards of corporate governance, Bharti Airtel has always strictly adhered to regulatory requirements and processes. In our letter to the regulator, we have already clarified the queries raised regarding revenues and margins of our long-distance business and the mobile business. Our carriage charges for the NLD (national long-distance) business are well within the ceiling provided by the authority and as per market practice and non-discriminatory.”

Earlier, in a letter dated October 21, 2008, Trai, quoting a news item, had sought clarifications from Bharti Airtel on the issue. Trai had said that Bharti Airtel’s long-distance segment had shown “exceptional growth in revenue and EBITDA margin”, although minutes of usage for the segment had not registered similar growth.