Tata Communications gross revenue under-reporting led to ₹645 crore lower govt. fee collection: CAG

Tata Communications under-reported gross revenue between 2006-07 to 2017-18 which led to a ₹645 crore lower levy of licence fee during the period, the Comptroller and Auditor General of India (CAG) has said in a report.

The CAG, in the report, also said the amount needs to be recovered from Tata Communications Ltd (TCL).

“Audit scrutiny of Audited AGR Statements with reference to Profit & Loss Statements and Balance Sheets in respect of NLD, ILD and ISP-IT licenses of TCL for the period from 2006- 07 to 2017-18 revealed that there was an under-reporting of Gross Revenue (GR) by ₹13,252.81 crore and consequent short levy of LF of ₹950.25 crore,” it said on Monday.

According to the CAG report, the Department of Telecommunications only levied ₹305.25 crore as a licence fee (LF) on the company.

“After deducting the DoT’s assessment of LF of ₹305.25 crore, the License Fee demanded from TCL by DoT was short by ₹645 crore for the said period, which needs to be demanded and recovered,” the report said.

“Considering minimum rate of 0.15% of AGR for Spectrum charges, the estimated revenue foregone on a very conservative basis was ₹67.53 crore towards spectrum charges for one carrier of E and V band and the annual expected revenue foregone was ₹3.30 crore for one Circle alone based on average AGR (adjusted gross revenue) reported by TSPs (telecom service providers) for the year 2020-21,” it added.

The E and V bands are expected to match data transmission speed equivalent to optical fibre and are in high demand by telecom operators for expediting the rollout of telecom services.

The CAG said the estimated foregone revenue on account of delay in allocation of E and V band spectrum is “only an indicative figure and the expected actual revenue could be higher based on the number and bandwidth of the carriers allocated to users.”

“DoT may take an early decision in consultation with TRAI on allotment/ assignment of spectrum for microwave access and backhaul network in E-band and V-band for providing support to mobile communications, ISP service providers and for effective roll out of 5G services,” the report said.

The Cabinet in June approved a partial allocation of spectrum in E-band to the telecom service providers to meet the backhaul demand of telecom operators.