CAG to MTNL : Implement late fee,surcharge on delayed payment

New Delhi, May 27 (UNI) The Comptroller and Auditor General of India (CAG) has made critical comments on the manner in which the Mahanagar Telecom Nigam Ltd (MTNL) introduced the Billing and Customer Care System (B&CCS) and has recommended implementation of late fee and surcharge module for delayed payment of bills to bring discipline in revenue realisation.

The CAG in its Performance Audit of the Telecommunications sector, which tabled in the Parliament, says the new B&CCS was intended to provide effective and accurate billing and efficient customer care services aimed at prevention of frauds. The CAG, however, said the MTNL could not solve the problem of revenue realisation for the company.

The CAG notes that MTNL invested Rs 30 crore for procuring a new billing system at a time when a convergent billing system was scheduled to be launched in March 2007.

It has blamed the service provider, involved in international trunk dialing, of poor planning and investment decision which could have been avoided.

The CAG also holds the MTNL responsible for not implementing the credit control module in B&CCS which resulted in accumulation of outstanding dues and probable loss of Rs 40.15 crore.

The credit control module in a computerised billing system which enables fixing credit limit for customers, based either on the amount of deposits received or by reviewing the usage pattern.

The MTNL was also criticised for its inability to fix the credit limit in the billing system, which lead to the piling up of dues.

The CAG places the outstanding revenue of the Delhi unit, as of November 2006, at Rs 41.48 crore as against 2.80 lakh subscribers.

The services of 76,916 subscribers have been disconnected, the Report says.

The corresponding figure for the Mumbai unit was Rs 34.34 crore as against 2.38 lakh subscribers and Rs 10.78 crore against 31,801 disconnected subscribers.

An analysis of data by the CAG for the 66th bill cycle of Delhi unit reveals that 238 subscibers whose outstanding bills ranges between Rs 10,000 to Rs 1,00,000 were allowed to continue their telephone facilities despite huge outstanding amounts.

This, the CAG Report says, would have an adverse effect on the cash flow of the company as a result of accumulation of large outstanding revenue.

MTNL's inablity to charge late fees or surcharge on delayed payments was due to inadequacies in the customisation of the system relating to levy of late fee, Report says.

The customisation of the system would have led to a more disciplined cash flow for the company, besides earning additional revenue.

Besides, due to non-customisation of the system the MTNL could not provide convenient facilities like hot billing and easy options of payments through credit cards as offered by other companies to its subscribers.

The CAG suggest that MTNL should strengthen its IT programmes and security areas and implement a business continuity plan to match the best practices in the industry. This will enable its survival in the competitive environment, the CAG says.

UNI