India mobile telecoms shares slump on extra payment reports

Thu Feb 14, 2013 3:54am EST

MUMBAI/NEW DELHI, Feb 14 (Reuters) - Shares in Indian mobile
telecoms operators including Bharti Airtel Ltd and
Reliance Communications Ltd slumped on Thursday after
newspaper reports said the government is demanding additional
money for their permits and airwaves.
    The Department of Telecommunications has sent letters
demanding over 12 billion rupees ($223.11 million) from Bharti
Airtel, 8.77 billion rupees from Vodafone India, and an
unspecified amount from Reliance Communications, in each case
for under-reporting revenues, the Economic Times reported.
    The newspaper said it had seen a copy of the letter sent to
Vodafone, but did not disclose how it had obtained the
information on Reliance or Bharti.
   Separately, Mint newspaper reported that the same department
is demanding the Indian unit of Vodafone Group Plc pay
around 9 billion rupees in additional dues, citing the letter
sent to the company.
   Carriers in India must share a percentage of their revenue
with the government every year as a means of paying for their
operating permits and airwaves.
    The three companies all declined to comment when contacted
by Reuters. DOT officials could not be reached.
    Bharti Airtel shares were down 3.5 percent as of 0829 GMT
and Reliance Communications was down 2.5 percent, compared with
an NSE index that was down 0.2 percent.
    In 2009, the government ordered an audit of the country's
top five mobile phone carriers to probe whether the firms had
under-reported revenue.
    Analysts said the reports of government demands for
additional dues added to regulatory uncertainty in the sector,
which already faces a bill for more $4 billion in airwave
surcharges. Operators are appealing against those surcharges.
($1 = 53.7850 Indian rupees)

 (Reporting by Abhishek Vishnoi in MUMBAI and Devidutta Tripathy
in NEW DELHI; Editing by Rafael Nam and Daniel Magnowski)
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