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Indian DoT To Audit Operators Following Revenue Plunge

India’s Department of Telecommunications (DoT) is planning to conduct a thorough audit of the country’s mobile operators after its revenue from licence and spectrum fees in 2017 fell 23% year-on-year.

With the DoT now suspecting that operators could be underreporting their revenues, it plans to investigate every company’s books across the past seven fiscal years, from 2011. The Economic Times noted that government duties were expected to drop again in 2018.

Indian operators have seen their revenues dwindle and profitability collapse following a fierce price war instigated by Reliance Jio’s entry to the market in September 2016. Market leader Bharti Airtel saw its revenue fall by 13.3% between April and June to INR150.3 billion ($2.1 billion). In the same quarter, third placed Idea Cellular’s consolidated revenue dropped 28% to INR58.9 billion.

The DoT has already issued notice of the audit to Aircel, which filed for bankruptcy in March. Other operators will soon receive the same notification. The price war in India has led to major consolidation, with Airtel acquiring both Telenor India and the wireless business of Tata Teleservices, while Vodafone India and Idea – the second and third largest players – have merged into Vodafone Idea, which now leads the market.

The audit will be yet another headache for Indian operators, with the DoT having recently asked India’s Supreme Court for clearance to demand bank guarantees worth almost INR330 billion from the country’s operators. The DoT argues that current operators holdings are not enough given the vast amounts of licence and spectrum fees that the government is owed by the industry. – Developing Telecoms.

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