In an audit, CAG has pointed out that Vodafone has not paid spectrum usage charges in all those circles where it is providing 3G services in tie-ups with Idea and Airtel.CAG audit finds Vodafone not paying for spectrum
TNN | May 19, 2013, 02.01 AM IST
NEW DELHI: Telecom giant Vodafone has been accused by the Comptroller and Auditor General (CAG) of India of not paying hundreds of crores in spectrum usage charges to the government while providing 3G services across most parts of India.
Since May 2010, when Vodafone won 3G spectrum in some of the 22 circles, it has been providing 3G services across most parts of the country.
Wherever it didn't win 3G spectrum, Vodafone has entered into an agreement with Airtel and Idea to provide 3G services. 3G services being provided by private telecom companies in circles where they didn't get the spectrum is presently under the Supreme Court's scanner. Airtel, Idea and Vodafone have over 12 million 3G users among them. Of which Vodafone has over 2.5 million users.
In an audit para sent to the department of telecom (DoT) recently, CAG has pointed out that Vodafone has not paid spectrum usage charges in all those circles where it is providing 3G services in tie-ups with Idea and Airtel.
The period — between September 2010 and March 2013 — is when Vodafone has not paid the spectrum usage charges at 3G rates in circles where they don't hold 3G spectrum, the CAG audit para has said. Whereas in the 10 circles where Vodafone had won 3G spectrum it has been paying spectrum usage charges at the 3G rate.
By not paying the spectrum usage charges—ranging from 3% to 8% of the adjusted gross revenue of a service-provider—at the 3G spectrum rate, Vodafone has caused the government exchequer loss of few hundreds of crores, the CAG has alleged.
If the mandated 300% penalty is imposed on Vodafone, the government's gain would run into several hundreds of crores, according to sources who have perused the CAG query sent to the DoT. The DoT has yet not replied to the queries, sources said.
On the contrary, both Airtel and Idea have paid up spectrum usage charges for all the circles where they are providing 3G services.
The adjusted gross revenue of a service-provider is estimated after some mandatory charges such as deduction of service tax, and the spectrum usage charges due to the government are estimated based on the rest of the total revenue.
The fresh allegations in the telecom sector comes at a time when the SC is hearing a case over the way the three companies have gone about making an arrangement among themselves to provide 3G services in circles where each of them didn't have 3G spectrum. DoT had ordered the companies to stop the practice, while imposing fines on them.
The apex court has asked the companies not to add any more 3G subscribers in circles where they don't have own 3G spectrum. The government-controlled Bharat Sanchar Nigam Ltd (BSNL) has accused the three companies of forming a cartel in 2010 while bidding for 3G spectrum.
http://timesofindia.indiatimes.com/india/CAG-audit-finds-Vodafone-not-paying-for-spectrum/articleshow/20128749.cms