India's federal telecommunications department is planning to issue notices to five mobile phone operators after the country's top auditor found the carriers misreported revenue and paid lower license fees to the government, a top official said Wednesday.
The Department of Telecommunications will issue notices to Bharti Airtel Ltd., Reliance Communications Ltd. and Idea Cellular Ltd., federal telecom secretary R. Chandrashekhar said.
Notices will also be issued to Tata Teleservices Ltd. and Vodafone Essar Ltd. -- the local unit of the U.K.'s Vodafone Group PLC. -- he said.
"The notices are being processed, it will be issued soon," Mr. Chandrashekhar said, declining to comment on the extent of revenue misreporting by the service providers.
He also said the notices seek to have telecom service providers pay the license fees on actual revenue as calculated by the auditor. Reliance Communications declined to comment, while none of the other service providers were immediately available.
All the operators have previously denied any underreporting of revenue.
The notices are being issued after India's top federal auditor -- the Comptroller and Auditor General of India, or CAG -- conducted a special audit on the revenue accounting practices of these companies, based on a complaint from a lawmaker, in May 2009. The lawmaker had complained in Parliament that some of the carriers were accounting for revenue from mobile services in other phone services that have lower license fees, causing a loss to the exchequer.
Telecom operators currently pay between 6% and 10% annually as license fees for basic mobile phone services, depending on the service areas they operate in, while others such as national and international long-distance calls command lower fees.
The federal body has audited the accounts of all five telecom companies for the financial years starting April 2006 through March 2009.
(C) WSJ
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