The Comptroller and Auditor General of India (CAG) has asked the Department of Telecommunications (DoT) to reply to its draft report wherein it was alleged that Chennai and Tamil Nadu service areas were merged resulting in undue benefit of Rs 24 billion to Bharti Airtel and Aircel.

In its draft report on “Hasty merger of Chennai metro and Tamil Nadu telecom circles” CAG has stated that 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 to ensure that customers were not required to pay roaming charges while using telecom services within a state. Later, plans for merger of Uttar Pradesh West and Uttar Pradesh East circles were also taken up. However, in 2005, only Chennai service area was merged with Tamil Nadu.

The CAG has stated that DoT has failed to provide explanation for leaving out other states from the proposed merger plan therefore depriving a large number of subscribers in circles other than Chennai and Tamil Nadu to benefit from the waiver off roaming charges.

According to CAG, the department allowed telecom operators to merge their licences in Chennai and Tamil Nadu circles, without paying any additional licence fee. Further, the operators’ merged licences got extended to the later date of any of the two licences being merged.

CAG has claimed that these issues were brought to DoT’s notice earlier as well but the department did not respond to the same. The auditor has now asked the DoT to respond to the issues raised by CAG by end of June 2014.