Attacking incumbent operators for alleged flouting of licence norms, Reliance Jio has asked the Department of Telecom to impose penalty on players including Bharti Airtel, Vodafone and Idea Cellular for paying lower licence fees in the fourth quarter.

The incumbent telecom operators had decided to pay the licence fee for the fourth quarter by deviating from existing rules laid out by the DoT. While the rules stipulate that the operators cannot pay a lower amount than what they paid in the previous quarter, the operators have cited falling revenues to deposit at least ₹1,000 crore less.

In a letter to DoT, Reliance Jio said the department should look into the instance of short payment of license fee for the fourth quarter of FY 2016-17 by incumbent telecom service providers, in violation of license conditions, which has led to a potential financial loss of over ₹400 crore to the government exchequer, and has clearly caused a revenue shortfall of the said amount in FY 2016-17.

“It is learnt that even though the DoT did not accede to COAI’s (Cellular Operators Association of India) request, the incumbent operators — Bharti Airtel, Vodafone India and Idea Cellular — actually went ahead and paid the said lower amount in Q4 (around 25 March 2017).” RJio said in its letter.

“The terms of the licence, as it stands today, does not allow the licensees to unilaterally decide and remit lesser licence fees, and any such act is a material breach of the licence terms.”

Actual revenues

The COAI had earlier written to the DoT seeking permission to pay the licence fee on actual revenues instead of assumptions. Under the existing rules, an operator has to pay the licence fee as a percentage of the revenue it earns. Since the revenue for the fourth quarter gets recorded after the end of the fiscal year, the DoT has made it mandatory for the operators to pay the licence fee for the quarter in advance, by March 25. The operators are supposed to make an assumption of the potential revenue in the fourth quarter.

The DoT has also imposed a rider that the assumed revenue cannot be lower than the income declared by the operator in the third quarter.

For example, if Airtel has paid ₹300 crore as licence fee to the Centre in the third quarter, it has to pay a higher fee in the fourth quarter by March 25. If there is any difference in the assumed and actual income, it has to be settled by April 15.

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