Top 7 telecom firms owe over Rs 2,100-crore penalty to Department of Telecom: CAG

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Telecom operators such as Airtel, Vodafone, Idea, RCom, Aircel, Tata Tele and BSNL have not paid penalties totaling 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 Rs 502.8 crore, Aircel Rs 402.31 crore, BSNL Rs 269.42 crore, Vodafone Rs 203.04 crore, Idea Cellular Rs 74.15 crore and Tata Teleservices (TTSL) 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.

As per the auditor, the penalty on RCom should be Rs 918.3 crore, Airtel Rs 906.4 crore, Vodafone Rs 601.88 core, Idea Rs 563.6 crore, BSNL Rs 492.55 crore, TTSL Rs 408.75 crore and Aircel Rs 312.85 crore. CAG has said that government has not achieved 100 per cent complaince 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 percent respectively,” 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.