DoT to appoint special auditors for 4 telcos this week

-- The Department of Telecom will appoint special auditors this week to verify the revenue figures of Bharti Airtel, Vodafone Essar, Idea Cellular and Tata's telecom companies, which operate in different areas of communications.

The special auditors will be from the CAG panel, a senior DoT official told PTI .

These auditors will have to give an undertaking to DoT about their previous clients. If they have worked in any of these companies previously, then they would not be engaged in the auditing, the official said.

DoT's special auditing is for those companies which have multiple licences-- UASL and NLD, ILD, IP and ISP. These four companies have all these licenses DoT's move comes after telecom regulator recommended appointment of auditors suspecting that operators were misreporting their revenues to avoid payment of license fee to the government through revenue share.

The official said the move is to check operators' scope to arbitrage which is shifting revenue from higher license fee to the lower side. The UASL (basic and mobile) telephony has a license fee of 6-10 per cent where as NLD, ILD, ISP and Internet Protocol has six per cent.

There is an issue of transfer pricing here which the special audit could detect, if any. Operators with multiple licenses could be doing internal transactions to benefit themselves and pay less revenue share to the government, it is suspected. We will wait for the outcome of the audits to know whether certain businesses like handset, tower business should be included for calculating revenue of the company, the official said.

DoT had earlier recommended a similar audit for the books of Reliance Communication.

DoT has already appointed Mumbai-based auditor Parekh & Co to scrutinize the accounts of Reliance Communications and its subsidiaries under a special audit to ascertain if there is any violation of revenue reporting norms to avoid payment of license fees. The company had denied any wrong doing.

TRAI had earlier asked the government to get the accounts of telecom companies independently audited.
From TMC News Room