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Sloppy auditing by DoT allowed telcos to understate revenues

Sloppy auditing by DoT allowed telcos to understate revenues

The Department of Telecommunications (DoT) has been held responsible by the national auditor for the loss of revenue caused by private telecom operators. The Comptroller & Auditor General (CAG) report on revenue sharing by private telecom service providers during 2006-07 and 2009-10 points to deficiencies in the assessment of final revenue share by the DoT. According to sources, the report is likely to be tabled in Parliament on Friday.

Sources privy to the report state that the Licence Finance wing in the DoT was responsible for the assessment of gross revenue and final computation of the revenue share payable by the licensees considering the collection details and verification reports received from the offices of the CsCA.

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Blaming DoT, sources further said, “The final demand of various licensed service areas (LSAs) of Vodafone group for 2006-07 to 2009-10 raised by the DoT were under assessed by about Rs 148 crore.”

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“The various items of revenue which were disclosed by the auditors of the company by bringing together AGR statements as well profit and loss account statements were overlooked,” the sources said citing the findings of the report.

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Putting the onus on DoT for loss of revenue, according to sources, the CAG report stated that lack of coordination between the licence finance wing and the Wireless Planning Finance division of DoT led to non-consideration of certain revenue items by the WPF.

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“The non-considered revenue were added back by the LF wing taking into account the verification reports of CsCA and disclosures in audited financial statement of private service providers, which resulted in under assessment of spectrum usage charges of private telcos by WPF wing,” the source said.

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The sources also maintained that the CAG reported that assessment of licence fee for national long distance (NLD), international long distance (ILD) and Internet Service Provider (ISP) for the years 2006-2007 to 2009-10 in respect of Dishnet Wireless Limited (Aircel) was not carried out despite a lapse of more than five years.

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The CAG report has claimed that six major telecom companies—Reliance Communications, Tata, Airtel, Vodafone, Idea and Aircel—have allegedly understated gross revenue of over Rs 46,000 crore for the mentioned period. When contacted, a senior official of Information and Telecommunications said, “Since private telcos come under the ambit of TRAI, the DoT has nothing much to do in the matters of revenue sharing of telcos.”

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The CAG report has claimed that six major telecom companies – Reliance Communications, Tata, Airtel, Vodafone, Idea and Aircel – have allegedly understated gross revenue of over Rs 46,000 crore for the mentioned period

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