Friday February 15, 2013

India celcos’ shares hit by report on extra payment

MUMBAI: Shares in Indian mobile telecoms operators including Bharti Airtel Ltd and Reliance Communications Ltd slumped yesterday after newspaper reports said the government is demanding additional money for their permits and airwaves.

The Department of Telecommunications (DOT) had sent letters demanding over 12 billion rupees (US$223.11mil) from Bharti Airtel, 8.77 billion rupees from Vodafone India, and an unspecified amount from Reliance Communications, in each case for underreporting revenues, the Economic Times reported.

The newspaper said it had seen a copy of the letter sent to Vodafone, but did not disclose how it had obtained the information on Reliance or Bharti.

Separately, Mint newspaper reported that DOT was demanding the Indian unit of Vodafone Group Plc pay around 9 billion rupees in additional dues, citing the letter sent to the company. Carriers in India must share a percentage of their revenue with the government every year as a means of paying for their operating permits and airwaves.

The three companies all declined to comment when contacted by Reuters. DOT officials could not be reached.

In 2009, the government ordered an audit of the country’s top five mobile phone carriers to probe whether the firms had underreported revenue.

Analysts said the reports of government demanded for additional dues added to regulatory uncertainty in the sector, which already faced a bill for more US$4bil in airwave surcharges. — Reuters

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