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CAG asks DoT to reply by June on telecom circle mergers

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New Delhi: The Comptroller and Auditor General has asked the DoT to reply to its draft report wherein it was alleged that Chennai and Tamil Nadu service areas were “hastefully” merged resulting in “undue benefit” of Rs 2,400 crore to Airtel and Aircel.

In its draft report CAG on ‘Hasty Merger of Chennai metro and Tamil Nadu telecom circles’ CAG alleged that the merger resulted in “undue benefits” to telecom operators and denied similar facilities to crores of subscribers in three  major states.

The government auditor on May 9 said “if DoT has any comments, then those comments should be informed within 6 weeks”.


In 2004, the then telecom Minister Dayanidhi Maran had asked the DoT to merge Chennai service area with Tamil Nadu; Mumbai with Maharashtra and Kolkata with West Bengal so that customers are not required to pay roaming charges within a state.

Later, plans for merger of Uttar Pradesh West and East were also taken up. In 2005, only Chennai was merged with Tamil Nadu.

The CAG said there was no reason in the records for leaving out other states from the plan and hence crores of subscribers

were bereft of the same benefit subscribers Tamil Nadu got.     The DoT allowed telecom licences of companies operating, at that time in Chennai and Tamil Nadu, Airtel and Aircel, to merge without additional fee.

The licences of these  companies also got extended to the later date of any of the two licences getting merged.

“The estimated financial implications due to non-auctioning of spectrum in 900 Mhz (12.4 Mhz of Chennai metro) in February 2014 is about Rs 2,400 crore,” the CAG report said.

When contacted, Airtel declined to comment. No immediate comments could be obtained received from Aircel.

The CAG had said that the DoT on its own fixed entry fee for  telecom licence in Tamil Nadu circle at Rs 233 crore, which  were issued alongwith spectrum, without determining market rate and taking views of concerned authorities.

It also said that the issue was pointed to out to DoT in March but its reply is still awaited.