6 telecom companies lied about income, says CAG

Comptroller and Auditor General of India (CAG) on Friday said that six private telecom companies — Bharti Airtel, Vodafone, Idea, Reliance Communications, Tata Teleservices, and Aircel — have understated their gross revenue by Rs 46,045 crore from 2006-07 to 2009-10 to the government, resulting in a loss of `12,489 crore to the exchequer.

Reacting to the CAG report, telecom minister Ravi Shankar Prasad ordered a special audit of the telecom companies.

The new telecom policy-1999 requires telecom service providers to pay a percentage of their adjusted gross revenue as licence fee. Mobile operators are also required to pay spectrum usage charges for the use of the radio frequency spectrum allotted to them.

“Audit observed non-compliance to the license conditions leading to short payment of revenue share to the government,” said CAG in its report tabled in the Parliament on Friday.

CAG said that verification of records of “six private telecom service providers indicated total understatement of Rs 46,045 crore in having corresponding impact of Rs 3,752 crore on licence fee and Rs 1,460 crore on spectrum usage charge. The interest on this short/ non-payment of licence fee and spectrum charge works out to Rs 7,276 crore.”

The minister said that this represents the legacy of the previous UPA government. “I take a serious note of this. I have instructed the secretary, telecom, and member, finance, to put in place robust system to prevent any recurrence of this,” said Mr Prasad.

He noted that though the CAG report will go to public accounts committee; whose recommendations will be final after the approval by the house, yet the department will take a special audit.

This, he pointed out, the department is authorised to undertake under the licensing conditions to discover whether any outstanding due, which is legitimately required to be paid by the operators. “Earlier a special audit was done for 2006-07 and 2007-08 whereby demand of Rs 1,846 crore have been demanded from five operators namely Bharti, RCom, Vodafone, Idea and Tata Teleservices. This is subject to litigation,” said the minister.