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Tuesday, Jan 25, 2005

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TRAI show-cause to Hutch, BPL for not submitting separate accounts

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New Delhi , Jan. 24

THE Telecom Regulatory Authority of India (TRAI) on Monday issued show-cause notices to Hutchison, BPL and Shyam Telelink for not submitting separate audited accounts.

The telecom regulator had asked all telecom service providers to submit accounts for each stream of their company's business by December 31, 2004.

While most operators have stuck to the deadline, the telecom regulator have asked the three companies and few other value-added service providers who have not done so to explain by January 28 as to why action should not be taken against them.

The objective of accounting separation is to identify cross-subsidisation practices, investigate cases of predatory pricing and other anti-competitive practices. The private cellular operators, for instance, had alleged that Bharat Sanchar Nigam Ltd (BSNL) was using revenues from the long distance services to subsidise its mobile tariffs. Accounting separation will also provide date to the regulator to determine cost-based tariffs, which in turn will be used in determining controversial aspects such as the access deficit charges (ADC) and other usage charges based on cost of providing a service.

As per the TRAI regulation, all operators that had accounting year ending on March 31, 2004, were required to submit their audited accounting separation statements to the regulator.

The reports include segregated cost records for various products and services provided by the operators.

The TRAI said that large integrated players like such as Reliance Infocomm, BSNL and Bharti, for whom the accounting separation was more relevant, have submitted the reports.

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