DoT to verify revenue figures of four major telecom firms
13 May 2009
The department of telecom (DoT) will appoint special auditors to verify the revenue figures of telecom service providers with multiple licences, such as Bharti Airtel, Vodafone Essar, Idea Cellular and Tata Telecom.
These four companies have all the various telecom licences like UASL and LND, ILD, IP and ISP and DoT's move for special auditing for these companies follow a missive from the Telecom Regulatory Authority of India (TRAI) that these companies may be misreporting revenue figures.
Reporting lower revenues for higher end licences would help the companies avoid payment of higher licence fee to the government through revenue share.
TRAI fears these companies are shifting revenue figures from the higher licence fee side to the lower licence fee side in order to gain from the arbitrage.
The UASL (basic and mobile) telephony has a license fee of 6-10 per cent where as NLD, ILD, ISP and Internet Protocol has six per cent.
DoT will select the special auditors from a panel approved by the Comptroller and Auditor-General of India (CAG), reports quoted a senior DoT official as saying.
Auditors who have worked or are working with these four telecom service providers are not eligible and prospective auditors will have to give an undertaking to that effect to DoT about their previous clients, the official said.
DoT's move comes after the telecom regulator recommended appointment of auditors suspecting that operators were misreporting their revenues to avoid payment of licence fee to the government through revenue share.
Once discrepancies are found in the revenue figures of these companies, officials hope to check the arbitrage scope for operators in shifting revenue from higher licence fee to the lower side.
