DoT to send demand notice to telcos for under-reporting revenues

NEW DELHI: The Department of Telecom will soon issue demand notice of over Rs 12,500 crore to six telecom operators who were found by CAG to have under-reported revenues to the tune of Rs 46,000 crore between 2006 and 2010.

"The DoT is in the process to issue demand notice of over Rs 12,500 crore to six telecom operators -- RCom, Tata Tele, Vodafone, Airtel, Idea and Aircel -- which the CAG has found to have under-reported revenues during the UPA regime," a Telecom Ministry official said.

The Comptroller and Auditor General of India (CAG) in a report tabled in Parliament in March said these six companies under-reported their adjusted gross revenue (AGR) by Rs 46,045.75 crore, leading to a loss of Rs 12,488.93 crore to the exchequer from 2006 to 2010.


"The report was tabled in March and the documents on the basis of which CAG prepared the report were received by the DoT recently in June. The DoT is preparing demand notice to recover this amount from telecom operators. There is no question of letting this revenue go," the official said.

As per the official, CAG has pointed out to the loss of Rs 12,488.93 crore but the DoT is calculating fresh amount by adding interest and penalties over it.

The six telecom operators, earlier in a joint statement, had contested the CAG findings. They said that the definition of AGR for the purpose of calculating licence fee is under litigation in various judicial forums, including TDSAT, High Courts and the Supreme Court.

"The issues pointed out by the CAG pertain to those disputes, which have either been settled or stayed by various Courts. Further, we would like to reiterate that our member companies follow the highest standards of corporate governance and have always been in compliance with all regulations," the statement had said.


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

Also, there was under-reporting of revenue from infrastructure sharing with other telecom operators as well as from forex gain.

The financial impact due to understatement of AGR stood at Rs 3,728.54 crore for Reliance Communications, Rs 3,215.39 crore for Tata Teleservices, Airtel (Rs 2,651.89 crore), Vodafone (Rs 1,665.39 crore), Idea (Rs 964.89 crore) and Aircel (Rs 262.83 crore), the CAG said.