Citigroup Global Markets has put out a research report cautioning investors
about an alleged discrepancy in revenue reconciliation of RCom. The report
says the differential has widened in fiscal year 2009 and the first quarter
of fiscal year 2010, by 25% and 36%, respectively.
   Going beyond the FY08 difference between Trai revenue data and the
financial statement already audited by a special auditor, the Citi
Investment Research and Analysis report says “the difference between Trai
revenue data and financial statements has increased from Rs 2,570 crore
(17%) in FY08 to Rs 4,360 crore (25%) in FY09, and further to Rs 1,740 crore
(36%) in Q1FY10’’.
   “While Data/VAS revenues would have increased during this period, this
alone seems inadequate to explain the widening difference, thus amplifying
these concerns beyond FY08, with a potential impact on valuation,’’ the
report adds. TOI has a copy of the analyst report. On Sunday, RCom had
decried the report of a special audit taskforce appointed by DoT.
   The report adds: “Restated profitability may have been materially
lower...we believe that the ‘true’ ARPU and wireless EBITDA in FY08 may have
been lower by 15% and 26% respectively’’.

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