The Hindu Business Line : TRAI proposes periodic audit of telecom players

New Delhi, Feb. 18 The Telecom Regulatory Authority of India has suggested that integrated telecom players, who offer a whole range of services, should be asked to submit the break-up of income from their various standalone subsidiaries in order to determine the revenue share payable to the Government.

The regulator has proposed that the Department of Telecom should carry out special audits of the operator’s account books every 3-5 years.

At present telecom operators are not required to submit the reconciliation statements of consolidated revenue of the group company with its standalone revenue of a particular segment.

Most of the telecom operators in the country are integrated companies offering various services such as cellular phone, fixed line telephone, broadband, Internet services and also long distance telephony services.

“In such a situation, it is necessary that there should be a well-accepted system to ensure that the revenue generated from the use of common resources is properly reflected in the books of accounts and Government levies/ dues paid correctly,” TRAI said in a letter to the DoT.

Licence fee

Operators are required to pay between 6 and 10 per cent of their income to the Government as licence fee.

The percentage revenue share is lowest for services such as Internet and long distance telephony compared to what a mobile operator in metro areas pays.

TRAI’s proposal is a fall-out of the recent controversy over Reliance Communications, which reported income from all non-voice telecom services under its Internet licence.

Other operators, including Bharti Airtel, have also been asked to clarify revenue reporting from handset bundling.

In a letter to the DoT, the telecom regulator said, “It has been noted that some of the leading integrated telecom service providers are not disclosing relevant financial information, which has direct bearing on the assessment of revenue of the particular segment.

“Currently, telecom companies are not required to submit the reconciliation statement of consolidated revenue of the company with its standalone revenue of a particular segment.

“It is felt that the finalising of reconciliation statement with break-up of standalone revenue of the operator with consolidated revenue of group companies in the sector may also be included.”

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