COAI for single audit for multiple agencies

Ahead of the planned special audit of telecom operators, industry body COAI has favoured a single audit exercise that meets the requirements of multiple stakeholders like the telecom department and sector regulator Trai.

"The DoT is entitled to do audits and we can't argue with that. But can we get to a point where a single audit exercise is conducted by one entity that is agreed to by all parties as competent, to do detailed checks required by various stakeholders like CAG, telecom department and Trai," Cellular Operators Association of India (COAI) Director General Rajan Mathews told PTI.

Mathews said the authorities that require audits to be conducted can spell out their requirements and the details they need, to the firm selected from the pre-qualified list.

The firm that audits can then issue reports based on the individual specifications of various agencies that require such audits to be conducted.

"Telecom Regulatory Authority of India (Trai), for instance, requires billing audit to be conducted and that ties also into the revenues (revenue aspect is something that government's audit will dwell into as well) ...these are inter-twined issues and a single audit makes sense," Mathews said.

He noted that under the current dispensation, Trai for the purpose of audit of billing systems has a list of pre-qualified auditors which operators can choose from.

COAI's views come at a time when the telecom department is in the process of appointing at least 4-5 auditors to conduct the planned special audit of private telecom companies for period 2011-12 to 2017-18.

The bids are expected to be submitted by December 18 by interested auditors that are empanelled under Comptroller and Auditor General of India (CAG), and the appointment is likely to take place by the month-end, an official familiar with the entire process had told PTI earlier.

The Department of Telecom (DoT)-initiated audit will be carried out to check for any under-reporting of revenue by telecom companies, and is expected to be wrapped up by middle of next year.

Audits will be conducted for all large private telecom companies as also those which have announced an exit or are in the process of merging with bigger rivals.

In all likelihood, the work on auditing will start from January.

Telecom service providers pay licence fees and spectrum usage charges to the government on the basis of their income.

The telecom sector has been bruised by falling tariffs, eroding profitability, and mounting debt in the face of stiff competition triggered by disruptive offerings by Reliance Jio, owned by Mukesh Ambani.

The industry has been seeking urgent relief measures entailing debt restructuring, cut in levies, and release of GST input tax credit locked up with the government.

Reflecting the financial stress of the industry, the gross revenue of telcos and licence fee paid to the government declined by around 10 percent to Rs 58,401 crore and Rs 2,929 crore, respectively, in April-June 2018 compared to the year-ago period, according to recent data by Trai.

"Gross revenue (GR) and adjusted gross revenue (AGR) of the telecom service sector for the quarter ended June 2018 has been Rs 58,401 crore and Rs 36,552 crore, respectively," Trai had said in its Indian Telecom Services Performance Indicator report released in October this year.

The year-on-year fall of 8.11 percent in AGR -- which is revenue earned from sale of telecom services alone -- led to decline in licence fees paid to the government by around 10 percent to Rs 2,929 crore.