New Delhi: The department of telecommunications (DoT) has ordered an audit of the country’s top mobile phone firms over charges that they were reporting revenues in a manner that attracts a lower licence fee.
These operators include Bharti Airtel Ltd, Vodafone Essar Ltd, Idea Cellular Ltd and Tata Teleservices Ltd.
“Yes, we have ordered an audit of the telecom operators,” Siddhartha Behura, secretary at DoT, told Mint.
In February, the department set in motion the process to begin a similar audit on Reliance Communications Ltd (RCom), ranked second among mobile phone firms by customers, after Bharti Airtel.
DoT’s action comes after the Telecom Regulatory Authority of India (Trai) found a jump in revenue from long-distance services in case of Bharti Airtel, which attracts only 6% licence fee, as against up to 10% for other mobile services.
Trai had carried out an analysis for five quarters (four quarters of 2007-08 and one quarter of 2008-09).
DoT has pointed out that the revenue from long-distance operations shows a substantial increase in the April-June 2008 quarter, as pointed out by the telecom regulator.
The latest DoT decision comes weeks after it engaged Jaipur-based Parakh and Co. to look into the books of Rcom after it was found that there were significant differences in revenues the firm had reported to Trai and stock exchanges. This was first pointed out by a research report by brokerage Kotak Securities Ltd.
A Bharti Airtel spokesperson said on Wednesday that it was not in contravention of any rule.
“Bharti Airtel has always strictly adhered to the regulatory requirements and processes,” the firm said. “In our communication to the regulator, we have already clarified the queries raised by them, which are in complete compliance and within (the) regulatory framework.”
An analyst said the decision behind the audits was not well thought of.
“If (the operators) wanted to rework revenues, then they could easily re-route the traffic in order to reduce the amount of revenue they pay to the government,” said Kevin Trindad, equities analyst at KR Choksey and Co. “The government needs to have a clearer definition for the revenues generated from mobile networks and long-distance networks.”
Shares of Bharti Airtel shed 1.72% to Rs615.05 on Wednesday on the Bombay Stock Exchange, while Idea Cellular lost 1.10% to Rs49.60.
RCom shares gained 3.06% to Rs179.95 on a day the benchmark Sensex index rose 1.99%.