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DoT issues notices to six telcos for under reporting Rs 29,474 Cr in revenues

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The Department of Telecom (DoT) has issued “demand-cum-show cause” notices to six private telecom operators for under-reporting their Adjusted Gross Revenue (AGR) amounting to Rs 29,474 crore as per Controller and Auditor General’s (CAG) findings, communications minister Manoj Sinha said in a written reply to Lok Sabha today.

As per CAG’s report, telcos including Bharti Airtel, Aircel, Tata Teleservices, Idea,  Reliance Communications (RCOM), and Vodafone under reported their AGR for 4 financial year periods from 2006-07 to 2009-10. Airtel topped the list with Rs 8,162 crore as under reported revenue, followed by RCOM which under reported revenues of Rs 7,701 crore.

dot-notice-telcos

Dispute between operators and DoT on definition of AGR

Minister Sinha added that the reason behind the under reported income is due to ongoing dispute between telcos and the DoT regarding definition of Adjusted Gross Revenue. DoT calculates License Fee (for spectrum usage, telecom license) as a percentage of AGR which does not include:

-PSTN (Public Switched Telephone Network) related call charges paid to other telecom service for interconnection;
-Roaming revenues passed on to other telecom service providers and;
-Service Taxes, Sales Tax paid to the Government.

AGR however includes properties of Gross Revenue like installation charges, late fees, sale proceeds of handsets or towers, revenue on account of interest, dividend, value added services, supplementary services, among others. However, telecom companies have challenged the definition with the Supreme Court and Telecom Disputes Settlement and Appellate Tribunal (TDSAT) stating that only revenue generated under License conditions or direct revenue should be considered for calculating AGR. RCOM has separately challenged the dispute with TDSAT through its petition.

“The definition of Adjusted Gross Revenue is under litigation since 2003. The matter is presently pending in the Hon’ble Supreme Court. As per orders of the Hon’ble Supreme Court, the DoT has been barred from taking any coercive step to recover the outstanding dues,” added Sinha.

TRAI fine for violating license norms

The show cause notice issued to telcos also comes at a time when operators including Airtel, Idea and Vodafone were penalized Rs 3050 crore in October by the telecom regulator TRAI for “willfully violating license conditions” by denying Points of Interconnection to new entrant Reliance Jio. The regulator had also asked the three operators to furnish information regarding traffic and congestion on the PoIs with Jio on a daily basis since 30th September. The penalty is currently pending approval from DoT.

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ