RCom revenue discrepancy again widening: Kotak Sec

The gap between Reliance Communications'(RComm) revenues reported to telecom regulator TRAI and those to investors is widening once again, brokerage house Kotak Securities said in its report.

 "The unexplained difference between RCOM's reported gross and net wireless revenues to the regulator and to the investor community has started showing material increase again. The gap had started narrowing after the June 2009 quarter (when it hit a peak of 57% on gross and 86% on net revenues). However, it has been on an upward trend over the past 4-5 quarters and stood at 50% on gross and a historically high 95% on net revenues for the March 2012 quarter," Kotak analysts Rohit Chordia and Shyam wrote in their report dated June 14.

 An email query sent to RCom earlier in the day on whether they agree or dispute Kotak's findings remained unanswered at the time of writing this report.

 There has been a long standing dispute between the company and TRAI, with the regulator accusing Reliance Communications of under-reporting its revenues.

On being questioned about the same by analysts post the September quarter results, RCom had said: "Over and above, revenues reported to TRAI, RCOM group gets revenues from various other sources which are not subject to revenue share and are of recurring nature."

 In October last year, an independent auditor appointed by the Department of Telecommunications (DoT) had also found a gap between the wireless revenue reported by RCOM to the Stock Exchanges and to TRAI. However, RCom denied these charges.

 It is not only RCOM which is allegedly under-reporting revenues. According to a Press Trust of India report in January this year, say there are five more companies including Vodafone and Bharti Airtel to whom the telecom ministry has issued show-cause notices for under-reporting revenues based on the findings of special audit report, for assessment years starting from 2006-08.