Six telcos understate revenues by Rs 61k crore: CAG

 The Comptroller and Auditor General (CAG) on Friday said that private telecom firms including Bharti Airtel, Vodafone and Idea understated revenues to the extent of Rs 61,064.5 crore during 2010-11 and 2014-15, leading to a ‘short payment’ of Rs 7,697.6 crore to the government.

The country’s top auditor — in its latest report titled Revenues by Private Telecom Service Providers up to 2014-15 tabled in Parliament — said that the verification of records of six private telecom service providers by audit-indicated total understatement of adjusted gross revenue (AGR) of Rs 61,064.56 crore for the period from 2010-11 to 2014-15.

For five operators — Bharti Airtel, Vodafone India, Idea Cellular, Reliance Communications and Aircel — the period of audit pertains from 2010-11 to 2014-15.

On the other hand, for Sistema Shyam’s audit covered from 2006-07 to 2014-15.
The CAG report also pointed to a “consequent short payment of revenue share to the Government of India to the tune of Rs 7,697.62 crore. “The interest due on short paid revenue share for the period up to March 2016 was Rs 4,531.62 crore,” it added.

Discounts/waivers given to post-paid subscribers over and above tariff plans submitted to Trai, which were in the nature of business expanse, were seen deducted from revenues in the accounts of Airtel, Vodafone, Idea and Aircel. This practice was a deviation from the license agreement, said the report.

Severe pressure

The revenue and profitability of established operators have comes under severe pressure, following the disruptive entry of Reliance Jio. As it is, the telecom industry owes Rs 6.10 lakh crore to various financial institutions and banks.

The government has recently constituted an inter- ministerial group to assess the financial stress of telecom companies and recommend measures to mitigate the crisis.