DoT to issue notices to five telcos to recover ~2,578 cr

The Department of Telecom (DoT) will issue notice to five telecom operators, including Tata Teleservices, Telenor and Reliance Jio, to recover ~2,578 crore, in the wake of the Comptroller and Auditor General of India (CAG) redflagging understatement of revenues by the firms.

“The DoT will raise demand of ~2,578 crore from the five telecom operators as was mentioned by the CAG in its report this month. The demand will be raised after reconciling the accounts,” an official source told PTI.

According to the report of the CAG tabled in Parliament on December 19, Tata Teleservices, Telenor, Videocon Telecom, Qaudrant (a Videocon Group firm) and Reliance Jio have understated revenues by over ~14,800 crore, resulting in a shortfall of nearly ~2,578 crore to the exchequer.

The CAG report said the government was paid ~1,015.17 crore less in licence fee, ~511.53 crore less in spectrum usage charge, and ~1,052.13 crore less as interest applicable on delay in payment.

The government collection from Tata Teleservices is short by ~1,893.6 crore, from Telenor by ~603.75 crore, Videocon by ~48.08 crore, Quadrant by ~26.62 crore and Jio by ~6.78 crore for licence fee, spectrum usage charge (SUC) and applicable interest charges.

"The notices are expected to be sent to telecom operators in January," the source added.

The CAG findings are based on the audit of Tata Teleservices and Tata Teleservices (Maharashtra) from 2010-11 to 2014-15; Quadrant Televentures over 2006-07 to 2014-15; Videocon Telecom from 2009-10 to 2014-15; Telenor from 200910 to 2014-15 and Reliance Jio Infocomm from 2012-13 to 2014-15.

Videocon Telecom, Telenor (Telewings) and Tata Teleservices have sold their mobile businesses to Bharti Airtel, while Quadrant has shut down its mobile services.

The CAG observed that telecom operators deducted discounts offered to dealers and customers; free talktime; interest earned from investments and some asset sales from their gross revenue.

According to the auditor, these should have been part of the adjusted gross revenue (revenue earned from telecom services) for calculation of licence fee and SUC.

CAG said these expenses are in the nature of marketing spends and cannot be deducted from revenue meant for calculating the government's share.

The auditor found that Tata Teleservices had written off bad debt that resulted in understatement of its gross revenue by ~1,026.01 crore.

Unitech Wireless transferred its mobile business to Telenor's Indian arm Telewing Communications at a profit of ~251.5 crore in 2013-14, but this profit was not included for computing revenue share with government.

Most of the deductions considered by the CAG for computing of revenue of telecom operators are sub-judice matters.