The news that India’s Department of Telecoms is to open an investigation into alleged historic under-reporting of revenues in India’s telecoms sector could hardly have come at a worse time for operators in the country.
According to a report published by ratings agency Fitch, India's Department of Telecoms intends to launch a fresh audit of the country’s mobile operators, covering the period 2012-2018. The audit will, it is hoped, make it clear whether or not telcos have been under-reporting their revenues.
The move comes at a time of widely reported financial challenges for India’s operators. Huge levels of debt, and ultra-competitive market conditions are making things tough for telecoms groups, even as cheaper services delight end users. Reliance Jio in particular, has brought cheap internet access to millions of Indians but the resulting price war has hurt rivals and may, they suggest, constrain infrastructure investment.
Don’t be surprised therefore if the audit is opposed by operators or its findings challenged. However, the government is unlikely, Fitch says, to excuse or reduce any subsequent debts that arise from historic under-reporting of revenues, not least because collecting the money – which could run into the billions of dollars – would help the government deal with revenue collection shortfalls in other areas.
