CAG flags financial gap of Rs 31,000 cr in telecom sector

Raising concerns over various policy issues in telecom sector, the CAG today flagged financial gaps to the tune of over Rs 31,000 crore (Rs 310 billion) including towards non-imposition of fines and the undue gains to private operators including Reliance Jio, Airtel, RCOM and Tata Tele.

The government auditor said Reliance Jio Infocomm got undue benefit of Rs 3,367.29 crore (Rs 33.67 billion) after the Department of Telecom (DoT) allowed it to provide voice calling facility under the new licensing regime, the Comptroller and Auditor General (CAG) said.

Whereas Bharti Airtel made an undue gain of Rs 499 crore (Rs 4.99 billion) because of DoT's decision to merge Chennai telecom circle with Tamil Nadu in a hasty manner in 2005, it added.

Denying having received any favour, Reliance Jio said, "We have always conducted our business as per the prevailing laws and have abided by the rules and regulations prescribed by the DoT and other regulatory authorities."

Reliance Communications and Tata Teleservices got undue benefit to the extent of Rs 882.06 crore (2009-10 to 2013-14) after the DoT granted telecom licences for dual technology in October 2007/January 2008, the CAG said.

The DoT though failed to implement TRAI's recommendations to levy spectrum usage charge for the combined total of spectrum allocated in different technologies (GSM and CDMA) in specific bands without any reason on record.

The government auditor also pulled up DoT's vigilance arm for failing to impose penalty to the tune of Rs 4,300 crore (Rs 43 billion) on telecom operators for violating mobile tower radiation rule.

The CAG also said the DoT allowed operators to enter into mutual commercial agreements for intra-service area roaming in 2008 resulting in adverse financial impact on revenues.

"We observed that the amendment was made in irregular manner and facilitated indirect sharing of spectrum by the telecom service providers in the guise of Intra Service Area Roaming (ISAR) without making any payment," the CAG said.

The auditor said though ISAR facilitated apparent sharing of spectrum, the charges for the same as proposed by DoT and approved by the Cabinet in November 2012 were not levied on parties involved in ISAR agreements.