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CAG pulls up telcos for deficient rural service

Tuesday, 5 August 2014 - 6:30am IST | Place: New Delhi | Agency: dna

Criticising the telecom department for not having adequate safeguards, the Comptroller and Auditor General (CAG) has said that performance of Reliance Communications Ltd (RCL), Reliance Telecom Ltd (RTL), Aircel and Vodafone regarding "commissioning of mobile services was very poor".

CAG noted that shared mobile infrastructure scheme of the Department of Telecom of the central government was successful in setting up and managing infrastructure sites by the infrastructure providers (IPs) as more than 99% of target was achieved.

"However, the main objective of providing wireless or mobile services to uncovered areas including rural, remote, hilly and tribal areas under the scheme was deficient ...," said CAG's report.

As per CAG's report, the service providers (companies) were to provide "mobile services within two months of the commissioning of the infrastructure site by the IP" as "against 12,853 sites which were made ready by the IPs for provision of services, the service providers could provide services only from 6,992 sites (August 2012)".

Among the four companies, RCL and RTL were leading the list. As per CAG's report, RCL failed to roll out services from 3,138 (65.77%) sites from the total of 4,771 sites it was expected to do so whereas RTL failed to roll out services from 1,713 sites (47.6%) from the total of 3,599 sites. Aircel failed to roll out services from 630 (40.8%) sites of the total of 1,544 sites while Vodafone failed to roll out services from 380 (12.93%) sites of the total of 2,939 sites.

CAG also noted that, "due to non-inclusion of adequate safeguards and penal clauses in the agreements with USPs (companies) in case of non/delayed roll out of services, no action could be taken against the
defaulting USPs".

CAG report further observed that BSNL, which had set up and was managing infrastructure sites, was burdened with outstanding dues (as on August 2012) of Rs 123 crore from five companies – Reliance, Vodafone, Idea, Airtel and Aircel.

Of the total of Rs 123 crore, Reliance had the major share with outstanding dues of Rs 78.10 crore (63.50%). Here also CAG observed absence of any clause in agreements to "take action either by BSNL or by DoT to rescind the agreement for non-payment of operating expenses and hence this had resulted in unwarranted burden on BSNL".

"…the defective subsidy support agreements provided undue benefit to defaulting USPs who did not provide the mobile services as agreed to or provided services, but with significant interruptions and downtime," CAG noted in its report.

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