ALLEGED IRREGULARITY.
--------------------------------------------------------------------------------
DoT officials said that the CVC order was procedural in nature since an MP had
lodged a complaint and an investigation was already under way in this regard.
--------------------------------------------------------------------------------
Our Bureau
New Delhi, Dec. 1 The Central Vigilance Commission has asked the Department of
Telecom to investigate alleged irregular revenue reporting by Reliance
Communications.
The Cellular Operators Association of India had earlier pointed out to the
Government that Reliance Communications was showing its income from non-voice
services under the Internet licence even though the facility was being provided
through the cellular network.
The CVC has asked the DoT to submit a report within 12 weeks. Its action is
based on a letter written by a Member of Parliament alleging irregularities in
the way the DoT had handled the issue. "In exercise of powers conferred on the
CVC- the Commission hereby directs that an investigation be conducted on the
charges/irregularities pointed out in the enclosed complaint (the letter
written by the MP). The report of this investigation should be submitted to the
Commission within 12 weeks of receipt of this order," said the letter from the
CVC to DoT.
Senior DoT officials said that the CVC order was procedural in nature since an
MP had lodged a complaint and an investigation was already under way in this
regard.
While operators do not pay any revenue share for income earned from Internet
services, they have to pay between 6 and 10 per cent of their annual revenue to
the Government from mobile services. In addition, mobile firms also have to pay
up to 4 per cent of the income as spectrum charges.
COAI had pointed out that an operator could make huge profits by showing income
from data services under the ISP licence. According to the estimates made by
the MP, who filed a complaint with the CVC, Reliance may have benefited up to
Rs 352 crore by separating non-voice revenues. The same MP had earlier shot off
several letters against Reliance-Anil Dhirubhai Ambani's various businesses
including Reliance Power and Reliance Energy.
The COAI's observation was in turn based on a report by financial services firm
UBS, which said that Reliance Communications reported revenues of Rs 3,160
crore to the telecom regulator in June 2008 but showed revenues of Rs 4,118
crore in its financial statements. "The main reason for the discrepancy between
RCom reported revenues and the TRAI reported revenue is that RCom reports all
its non-voice revenues through one of its subsidiary that has an ISP status,"
said the UBS report.
In an earlier response to similar query, Reliance Communications had stated
that its accounts have been duly audited and certified by internationally
recognised auditors and are in full compliance with the prescribed reporting
framework. The company had stated that it has a substantial customer base of
over one million Internet services subscribers under its ISP licence.
Additionally, the company has a subscriber base of over 3 million in rural
areas under the USO Scheme of the government whose revenues have certain
exemption under the policy guidelines
http://www.thehindubusinessline.com/2008/12/02/stories/2008120252140100.htm
Who is wise? He that learns from everyone. Who is powerful? He that governs his
passions. Who is rich? He who is content. Who is that? Nobody
- Benjamin Franklin
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