6 telcos get notice over revenue under-reporting

CAG said they under-reported their adjusted gross revenue by Rs 46,045 cr, leading to a loss of Rs 12,488 cr to the exchequer

The department of telecommunications (DoT) has started issuing notices to six telecom operators for under-reporting revenues during 2008-09.

According to sources in the telecom ministry, notices for one circle each of every operator were issued last Friday and the same will be done for the remaining 21 circles in the next two months. After this, the department will issue notices for 2009-10.

The DoT in 2012 had raised a demand of Rs 1,637 crore from Airtel, Vodafone, Reliance Communications, Tata Teleservices and Idea Cellular for under-reporting revenue during 2006-07 and 2007-08.

The Comptroller and Auditor General (CAG), in its report presented in Parliament in March this year, had said Reliance Communications, Tata Teleservices, Vodafone, Airtel, Idea and Aircel under-reported their adjusted gross revenue (AGR) by Rs 46,045.8 crore, leading to a loss of Rs 12,489 crore to the exchequer between 2006 and 2010.
 

The loss to the government comprises Rs 5,300 crore as licence fee and spectrum usage charges, and Rs 7,300 crore in interest.

The Opposition Congress earlier this month had charged the government with creating conditions that would allow the six telecom companies to avoid paying the amounts claimed. In a related development, the Supreme Court is likely to take up the matter regarding definition of the AGR on July 27. Telecom industry associations have repeatedly said matters relating to interpretation of gross revenue are under litigation in various judicial forums.

The CAG in its report had said the financial impact due to the understatement of the AGR stood at Rs 3,728.5 crore for Reliance Communications, Rs 3,215.4 crore for Tata Teleservices, Rs 2,651.9 crore for Airtel, Rs 1,665.4 crore for Vodafone, Rs 964.9 crore for Idea and Rs 262.8 crore for Aircel.

The auditor reported instances of under-reporting of revenue due to netting off discounts granted to post-paid subscribers and under-invoicing of roaming revenue due to setoffs for inter-operator traffic discounts paid to other operators.

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IN A SPOT

• Notices for one circle each of every operator were issued last Friday, say sources
   
• This will be done for remaining 21 circles in the next two months
   
• Then, the DoT will issue notices for 2009-10