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Top 7 Telecom Firms Owe Over Rs. 2,100 Crore Penalty to DoT: CAG

Top 7 Telecom Firms Owe Over Rs. 2,100 Crore Penalty to DoT: CAG

By Press Trust of India | Updated: 4 August 2014 12:18 IST

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Telecom operators such as Airtel, Vodafone, Idea, RCom, Aircel, Tata Teleservices and BSNL have not paid penalties totalling Rs. 2,116.95 crore levied on them for non-compliance of subscriber verification rules that are important for national security, CAG said in its report.

"We further noticed that out of Rs. 2506.80 crore of penalty levied by the DoT and the TERM Cells during 2009 to 2012 for defective CAFs, the service providers had paid only Rs. 389.85 crore," the Comptroller and Auditor General (CAG) said in its latest report.

As per data provided by the Department of Telecom (DoT) to CAG, RCom has maximum outstanding due of Rs. 594.76 crore, followed by Airtel at Rs. 502.8 crore, Aircel at Rs. 402.31 crore, BSNL at Rs. 269.42 crore, Vodafone at Rs. 203.04 crore, Idea Cellular at Rs. 74.15 crore and Tata Teleservices (TTSL) at Rs. 70.47 crore.

The Telecom Enforcement Resource and Monitoring (TERM) Cell levies Rs. 1,000 penalty for every wrong Customer Application Form (CAF) filled for mobile connections if 95 percent of forms are correct.

The penalty escalates to Rs. 5,000 per wrong CAF if compliance rate is between 90-95 percent and goes up to 50,000 per form if it is below 80 percent.

CAG estimated that the total penalty in the year 2012 alone works out to be at Rs. 4,204.33 crore as compared to Rs. 2,506.80 crore levied by the DoT.

"Based on the figures worked out, it could be seen that total defective CAFs for the 7 major service providers was 4.20 crore for the year 2012. Even, if a minimum penalty of Rs. 1,000 is levied for each defective CAF, total penalty works out to be Rs. 4,204 crore for the year 2012 alone," CAG said.

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As per the auditor, the penalty on RCom should be Rs. 918.3 crore, Airtel at Rs. 906.4 crore, Vodafone at Rs. 601.88 core, Idea at Rs. 563.6 crore, BSNL at Rs. 492.55 crore, TTSL at Rs. 408.75 crore and Aircel at Rs. 312.85 crore.

CAG has said that government has not achieved 100 percent compliance to subscriber verification rules because of "ineffective monitoring and weak control by DoT and the TERM Cells."

The auditor also said that the findings of TERM Cells regarding non-compliance during regular monthly audits could not be relied upon as surprise checks had revealed non-compliance to a large extent.

"The compliance level of most of the service providers was found to be very poor in cases of complaints/surprise checks by TERM Cells. In the case of some of the service providers, such as Tata Teleservices and Bharti Airtel, the non-compliant CAFs were as high as 84 and 55 per centrespectively," CAG said.

The auditor has suggested that DoT should monitor levy of penalty by TERM Cells and enforce its recovery from the service providers without delays.

The CAG also said that DoT should devise and implement a comprehensive subscriber verification policy and ensure timely issuance of orders for achieving 100 percent subscriber verification aiming towards strengthening the national security.

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