Five Telecom Operators to get Slap by DoT with Penalty of Rs 1594 crore

Department of Telecommunications (DoT) India, will slap penalties totaling Rs 1,594 crore on five telecom operators in the country for having understating revenues and paying less levies. The five telecom operators to whom notice would be sent include Bharti Airtel, Idea Cellular, Vodafone, Tata Teleservices, Tata Communications and Reliance Communications. The penalty amount of Rs 1,594 has to be collectively paid by this telecom operators.

The DoT plans to send demand notices to Bharti Airtel, Idea Cellular, Vodafone, Tata Teleservices, Tata Communications and Reliance Communications by the month-end. The responses by all companies to the showcause notices have been dismissed,” an official in the department confirmed to The Economic Times.

Earlier this year these telecom companies were sent with showcause notices after a DoT appointed panel endorsed the findings of external auditors, which said these operators had understated revenues by Rs 10,268 crore during 2006-07 and 2007-08. According to DoT estimate Bharti Airtel will have to pay penalties to the tune of Rs 292 crore while for Vodafone it will be Rs 254 crore. The penalty for Idea Cellular works to Rs 113 crore, Tata Teleservices at Rs 273 core and Tata Communications at about Rs 120 crore while Reliance Communications will have to pay about Rs 551 crore . This penalty includes interest and other related fines for the alleged violations.

Telecom operators pay 6-10% of their annual revenue as licence fee and 2-6% as spectrum usage charges, reporting lower revenue brings down the component they have to share with the government. This was revealed by the external auditors appointed by DoT. The DoT had also obtained the law ministry’s approval prior to sending out showcause notices.

According to Economic Times report, in 2009, the Government had ordered external audits on the books of all leading private telecom companies to make sure that they had correctly reported and shared revenues with it. Jaipur-based Parakh and Co audited RCOM’s books and was the first to submit its report. Contractor, Nayak and Kishnadwala were the auditors for Bharti Airtel, Chhajed and Doshi for Idea Cellular and SK Mehta and Company looked at the books of Vodafone.

In response, the telecom companies executives said they have asked the Govt to have a special audit of their financial accounts for the period of 2006-2008. It seems Govt agencies are tightening the grip on this private operators.

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