Reporting System on Accounting… Bare Act

The source publishes this enactment as a single document rather than provision by provision, so the whole text is below and there are no per-section pages for it. Nothing has been shortened.

Type	Regulations
Year	1997
Jurisdiction	Central
Ministry	Ministry of Communications
Status	In force as published by the source
Text	Published as one document, as the source published it
Subjects	transport

Telecom Regulatory Authority of India New Delhi the 23rd February,2004 Notification No.414/7/99-FA.- In exercise of the powers conferred upon it under section 36 read with clause (i) of sub-section 1(b) of Section 11 of the Telecom Regulatory Authority of IndiaAct, 1997 as amended by Telecom Regulatory Authority of India (Amendment) Act, 2000, the Telecom Regulatory Authority of India, Service Providers (Maintenance of Books of Accounts and Other Documents) Rules, 2002 and the order/notification issued there under, the Telecom Regulatory Authority of India hereby makes the following Regulation: The Reporting System on Accounting Separation Regulation, 2004 (4 of 2004) Section I

1. Short title, extent and commencement: - (1) This Regulation shall be called “The Reporting System on Accounting Separation Regulation, 2004”.

(2) This Regulation shall apply to every service provider, which is engaged in any one or more of the following telecommunication activities, namely: -

(i) Basic Telephone Service;

(ii) National Long Distance Service;

(iii) International Long Distance Service;

(iv) Cellular Mobile Telephone Service;

(v) Very Small Aperture Terminal Service (VSAT);

(vi) Radio Paging Service;

(vii) Public Mobile Radio Trunk Service;

(viii) Global Mobile Personal Communication Service; and

(ix) Internet Service.

(3) The Regulation shall come into force on the date of its publication in the Official Gazette. Section II

2. Definitions: - In this Regulation, unless the context otherwise requires -

(a) “Act” means the Telecom Regulatory Authority of India Act, 1997 as amended by the Telecom Regulatory Authority of India (Amendment) Act, 2000;

(b) “Authority” means the Telecom Regulatory Authority of India established under sub-section (1) of section 3 of the Act;

(c) “Cost centre” means the support function or department of a company or a network element for which costs are incurred; Page 2

(d) “Historical Cost Accounting” means a system of accounting where assets, liabilities, costs and revenues are recorded at the value when the transactions were incurred and where assets are valued and depreciated according to their cost at the time of purchase;

(e) “Holding gain or loss” means gain or loss when the replacement cost of an asset changes while the asset is still being held at the Historical Cost. Mathematically, Holding Gain or Loss= NBVt-1X(GRCt /HCA) - NBVt-1X(GRCt-1 /HCA) Where, NBVt-1 = Written down value of an asset at historical cost at the beginning of year t, GRCt = Gross replacement cost of an asset at the end of year t, HCA = Cost of an asset at the time of its purchase;

(f) “Financial capital maintenance” is a methodology of recognising profit after taking account of holding gain or loss arising as a result of replacement cost accounting;

(g) “Geographical area” is service area, which is to be treated as separate segment for purpose of preparing Reports under regulation 4. Geographical areas are mentioned in the column (3) of Schedule – I for services mentioned in column (2) of that Schedule;

(h) “Intra circle call” means long distance call within boundaries of one telecom circle;

(i) “Intra-circle network” means network to carry long distance traffic within boundaries of one Telecom Circle;

(j) “Local call” means calls originating and terminating within the same local area and charged at local call rates;

(k) “Long distance call” means a call terminating in a local area other than in which it is originated;

(l) “Modern equivalent asset” means value of currently available asset with the same level of capacity and functionality as that of original asset;

(m) “Product” means a sub-service within a service which is treated as separate accounting segment and profit and loss statement is to be prepared for each of the product mentioned in the column (4) of the Schedule I for services mentioned in column (2) of that schedule;

(n) “Profit Centre” means a service or a product offered by a service provider to which revenues and cost can be traced so that profits can be ascribed to that activity; Page 3

(o) “Related party” means parties who are considered to be related if at any time during the reporting period one party has the ability to control the other part or exercise significant influence over the other party in making financial and /or operating decisions;

(p) “Related party transaction” means a transfer of resources or obligations between related parties whether or not a price is charged;

(q) “Regulation” means The Reporting System on Accounting Separation Regulation, 2004;

(r) “Replacement cost accounting” means assets are carried in the financial statement at the amount of cash or cash equivalents that would have to be paid if the same or an equivalent asset were acquired currently;

(s) “Reports” mean Accounting Separation statement, both financial and non-financial, prepared by service providers under the provision laid down in regulation 4;

(t) “Rules” mean the Telecom Regulatory Authority of India, Service Provider (Maintenance of Books of Accounts and Other Documents) Rules, 2002;

(u) “Service Provider” has the meaning assigned to it in clause (j) of Section 2 of the Act;

(v) “Supplementary depreciation” means depreciation for an asset under replacement cost accounting less its depreciation under historical cost accounting;

(w) “Toll Quality Service” or “Below Toll Quality Service” have the same meaning as laid down in the Regulation on Quality of Service for VOIP based International Long Distance Services, 2002;

(x) “Wholesale” means product for which revenue is received from other service providers for terminating calls; and

(y) Words and expressions used in this Regulation and not defined but defined in the Act and/or the Rules and regulations made there under shall have the same meanings respectively assigned to them in the act and/or the rules and regulations made there under.

3. Manual - (1) In order to execute and implement the accounting and reporting practices prescribed in the Rules and/or the Regulation, service providers shall prepare a manual containing comprehensive and complete documentation of policies, principles, methodologies and procedures for accounting and cost allocation.

(2) In particular, and without prejudice to the generality of the regulation 3(1), such manual may provide for following details, namely: - Page 4

(a) An overview of the service provider’s organisational structure;

(b) A list of the entities in the telecom sector with in the group. Relationship of the Service Provider with other group companies/related parties in terms of interconnection, common resources etc.;

(c) An overview of the financial accounting system which may include policies relating to capitalisation, depreciation, advance receipts of revenue, security deposits, provision for bad and doubtful debts etc.;

(d) Description of the treatment of related party transactions, allocation of shared services and allocation of jointly used assets;

(e) Products, Services, Network Elements and Geographical Areas which shall be treated as separate segments for preparing Accounting Separation Statements;

(f) Description of Accounting policies for allocation and apportionment of revenue, cost, assets and liabilities;

(g) Accounting System followed for recording and generation of the accounting separation information and reports which may include list of cost and profit centres, linkages of financial heads to cost and profit centres;

(h) Description of studies, surveys and model employed in cost apportionment and allocation process;

(i) Definition of terms used in the manual; and

(j) Procedure for maintenance and updating manual.

(3) The copy of the manual shall be filed with the Authority within three months from the date of publication of this regulation.

(4) All subsequent changes in the manual, together with the reasons thereof shall be submitted to Authority.

4. Reports - (1) Based on the information available in the books of accounts and other documents specified in the Rules and the order/notification issued there under, service provider shall prepare geographical area-wise following financial and non-financial reports: - Financial Reports Profit and Loss Statements

(i) Profit and loss statement of the products mentioned in column (4) against services rendered by the service providers specified in column

(2) of the Schedule I. The statement shall be prepared in the Proforma “A” of Schedule III;

(ii) Separate Profit and Loss statement for each of the service rendered by the service provider and specified in regulation 1(2). The statement shall be prepared in the Proforma “B” of Schedule III; Page 5 Product Cost Statement

(iii) Product wise Cost Sheet in the Proforma “C” of Schedule III; Network Element Cost Statements

(iv) Network Element wise Cost Sheet shall be prepared which clearly indicates cost and its allocation to various products. An indicative list of Network elements of services for which these cost sheets shall be prepared is at Schedule II. However, the list of network elements shall depend on network architecture used by the service provider. The Network Element Cost Statements shall be prepared in the Proforma “D” of Schedule III;

(v) A summary sheet showing network element wise total cost, cost driver and cost per unit of usage. The statement shall be prepared in Proforma “E” of Schedule III;

(vi) A summary sheet indicating network element wise cost allocated to various products. The statement shall be prepared in Proforma “F” of Schedule III; Capital Employed Statements

(vii) Capital Employed Statement for each of the service rendered by the service provider and specified in regulation 1(2). The statement shall be prepared in Proforma “G” of Schedule III;

(viii) A statement showing allocation of capital employed for a service to the network elements. The statement shall be prepared in Proforma “H” of Schedule III; Fixed Asset Statement

(ix) Statement showing category wise fixed assets and depreciation in the Proforma “I” of Schedule III’; and Non-Financial Report

(x) A statement of operational data relating to network architecture, network usage, network capacity, product, services volumes, tariffs, etc. Reports for services mentioned in Regulation 1(2) shall be prepared in Proformae “L” to “T” of Schedule III.

(2) The service providers shall prepare Reports mentioned in Regulation 4 (1) every year on the basis of historical cost accounting and every second year on the basis of replacement cost accounting:

Provided that if less than three years have elapsed since issue of the license to provide a particular service, the financial statements based on Replacement Cost Accounting may not be prepared for that service. Page 6

(3) The profit and loss statement and capital employed statement mentioned under Regulation 4(1) of this regulation prepared on the basis of the Historical cost Accounting shall be reconciled with the Annual Financial Statement of the service provider prepared under Section 211 of the Companies Act, 1956. The reconciliation statements shall be prepared in Proformae J and K of Schedule III.

(4) The service providers shall prepare financial reports mentioned in regulation 4(1) on the basis of replacement cost accounting, by-

(i) following financial capital maintenance methodology;

(ii) limiting cost adjustment to the fixed assets;

(iii) ignoring replacement cost adjustment for assets having life of less than 3 years;

(iv) taking cost of modern equivalent asset when existing asset is not available due to change in technology. Whenever, old asset is replaced by modern equivalent asset, change in operational expenditure as a result of such replacement shall also be accounted for; and

(v) clearly indicating holding gain or loss, supplementary depreciation and change in the operational cost due to replacement of old asset by modern equivalent asset.

5. Periodicity of submission of report – (1) The service providers shall submit audited reports based on the historical cost accounting every year within six months of the end of accounting year to the Authority.

(2) The service provider shall also submit reports based on the replacement cost accounting every second year within six months of the end of accounting year to the Authority.

(3) The reporting period shall be same as followed by the company for preparation of the annual financial accounts under sub section (4) of section 210 of the Companies Act, 1956.

Provided that, if reporting period exceeds fifteen calendar months, the accounting separation statements shall be divided into 12 months and the balance period.

6. Audit - (1) Every service provider, to which these regulations apply, shall appoint an auditor who is qualified for appointment as an auditor under section 224 or 233-B of The Companies Act, 1956.

(2) The auditor shall audit the reports so prepared.

(3) The auditor in his report shall express an opinion as to whether the reports have been properly drawn in accordance with the regulation and he has received all information and explanation necessary for the purpose of audit.

7. Confidentiality - The Authority shall ensure the confidentiality of the financial information submitted under various provisions of the Regulation. Page 7

Provided that, where the Authority is of the opinion that it is necessary or expedient to disclose the information in public interest, it may, for reasons to be recorded in writing, do so.

Provided further that no information shall be disclosed by the Authority, except after giving the company an opportunity of making such representation in writing, as it may wish to make in that behalf and taking such representation into consideration.

8. Interpretation - Where any doubt arises as to the interpretation of the provisions of these regulations, the matter shall be referred to the Authority whose decision thereon shall be final. Page 8 Section III Explanatory Memorandum

1. An essential ingredient of effective regulatory framework is the arrangement, which enables the system to generate accounting statements for analysing costs, revenues and capital employed in major areas of an operator’s business. The financial reporting at the corporate/entity level presents aggregate information, which does not provide details for regulatory purpose such as:

(i) Measuring financial performance of products;

(ii) Monitor return on products and services regulated with price ceilings;

(iii) Identify cross subsidising, Investigating predatory pricing, discrimination and other anti-competitive conduct;

(iv) Understanding the inter-operator arrangements in terms of price and cost, and

(v) Monitoring adequacy of access deficit etc.

2. This Regulation will facilitate the availability of more detailed and disaggregated information on revenues and costs on regular basis.

3. The central government published Notification No. GSR 782(E) dated

27.11.2002 to specify books of accounts and other documents, which are to be maintained and notification/order no 7-4/2001-tariff dated 21st October 2003 in the Gazette of India dated 8.11.2003 to specify the manner in which books of Accounts and Other documents are to be maintained. These books of accounts and other documents form the underlying records for preparation of the reports prescribed in the Regulation.

4. The Reporting System on Accounting Separation can be broadly classified into the following segments:

4.1 Service-wise Reporting- For every geographical area, separate profit and loss statements are to be prepared for each of the services mentioned in clause (2) of regulation 1. The geographical area wise profit and loss statements for a particular service when aggregated at the company level will provide information on overall profitability of a that service. The authority requires profit and loss report for services to understand the profitability of each service and whether it is influenced by cross-subsidisation;

4.2 Product-wise Reporting – Geographical area wise profit and loss statements are to be prepared for each of the sub-service or product mentioned against services rendered by the service provider in Schedule I. The profit and loss statements of all products of a service when aggregated for a geographical area shall provide profit and loss statement for service in that geographical area.

4.3 Statements on Capital Employed and Cost Sheets of Network Elements- The cost sheet provide information about costs incurred on network elements. The Capital Employed statements provide input for cost sheets on Return on Page 9 Capital Employed (RoCE) and Depreciation that is to be allocated to a particular Network Element/product. Cost Sheets of Network Elements are required to decide network element based pricing of products or interconnection usage charges; and

4.4 Non-financial statements- These statements will provide information on operational data relating to network architecture, network usage, network capacity, product and services volumes and other measures of activities. These reports help to understand the methodology adopted by service providers to apportion and allocate joint cost and for meaningful analysis of financial results. Framework for generation of Profit and Loss Statements and Network cost sheets.

5. The generation of financial reports on Accounting Separation assume a methodology and the Authority expects service providers to follow the same methodology for preparation of reports mentioned in the Regulation. Details of this methodology are available in the “Guidelines on System on Accounting Separation” prepared by the Authority and can be accessed from TRAI’s web site. The conceptual framework of this methodology can be understood using following flow diagram: Revenue and Costs captured from GL Product Support function / department Product Product Profit and Loss Account ALLOCATION SUMMATION Network Elements Network Elements Page 10 Step 1 Capture revenue and cost from the books of account that is from general ledger and allocate them to Products, Network elements and Support Functions/Department. Step 2 • Attribute the cost of support functions/departments to profit centres (i.e products) and other cost centres (i.e. network elements). These costs would have to be attributed using appropriate cost drivers. • The cost of support functions would have to be allocated to the profit centres or other cost centres depending upon whether such costs are: � Directly attributable � Indirectly attributable � Un-attributable Step 3 • After undertaking the above two steps, the cost for each network element would be available. The cost for each network element would include direct cost incurred for operation and maintenance of the respective network elements and also the allocated cost of support function. • The next step is to apportion the network element cost to various products, which should also include the return on capital employed. • The cost of each network element is to be attributed to products based on a causation effect i.e. cost is directly allocated to the products for which the network element is used, for example international gateway will be allocated directly to ILD calls, similarly SMS server cost is directly allocable to SMS charges. In case the network element is used for more than one service then the cost of network element is to be attributed to various products based on an appropriate cost driver, which primarily will be usage based such as usage in minutes, number of connections, number of circuits or bandwidth, etc. Step 4 • This step involves aggregating costs of various services / products for preparation of profit and loss statements. Indu Liberhan Principal Advisor (FA &IFA) F. No.: 414-7/99-FA Page 11 Section IV Schedule I S. No. Type of Operating License Licensed Area Product/Network Service

(1) (2) (3) (4) 1 Basic Telephone Service Licensed area i.e. telecom circle or metro city

1. PSTN Access (Rental) a) POTS b) ISDN c) Bulk (Franchisee) d) Leased Circuit e) Others

2. Other Products (PSTN) a) Local b) Intra-circle c) NLD d) ILD e) Others

3. WLL (Limited Mobility) a) Rental b) Local call c) Intra-circle call d) NLD call e) ILD call f) Others

4. WLL (Fixed) a) Rental b) Local call c) Intra-circle call d) NLD call e) ILD call f) Others

5. Wholesale (Interconnection) a) BSO to BSO b) WLL to BSO c) NLDO to BSO d) ILDO to BSO e) Leased Circuits f) Others 2 National Long Distance Service Licensed area i.e. All India

1. Intra- circle

2. NLD

3. ILD

4. Leased circuits

5. Others Page 12 Note: Products/Network Services mentioned at 1, 2 and 3 provided through toll quality network and below toll quality network shall be considered as separate products/network services 3 International Long Distance Service Licensed area i.e. All India

1. ILD - Toll Quality Service

2. ILD- Below Toll Quality Service

3. Leased circuits

4. Others 4 Cellular Mobile Telephone Service Licensed area i.e. telecom circle or metro city

1. Following products for Pre-paid and Postpaid subscribers shall be considered separate Product/Network Services :- a Rental b. Airtime c. Roaming c SMS d GPRS e Others 2 Wholesale (Interconnection) a MSO to MSO b BSO to MSO c WLL to MSO d NLDO to MSO e ILDO to MSO f other 5 Very Small Aperture Terminal Service Licensed area i.e. All India

1. VSAT service

2. Other (Hardware sale) 6 Radio Paging Service Licensed area i.e. telecom circle or city No products subclassification. 7 Public Mobile Radio Trunk Service Licensed area i.e. telecom circle or city No Product Subclassification 8 Global Mobile Personal Licensed area i.e. All India No product Sub classification Page 13 Communication Service 9 Internet Service Licensed area i.e. All India or telecom circle or city

1. PSTN dial up

2. ISDN dial up

3. Dedicated

(a) DSL

(b) Wireless

(d) Cable

4. Application services

(a) Voice services (Internet Telephony)

(b) Others (VPN, Web hosting, co-location etc.) Page 14 Schedule II Network Elements of Various Services Network Network elements Basic Telephone Service PSTN Access Copper loop (This would include Drop wire or internal wiring, Distribution point, Pillar, Cabinet, Transmission –cables, and Main distribution frame) ISDN (This would include Terminal adapters, Network termination device, Line termination equipment and Exchange termination equipment) POTS (This would include customer premises apparatus PCO terminal, Exchange line card / RLU, other non traffic sensitive equipment and Remote Switching Unit (RSU), Digital Loop Carrier (DLC) etc.) Bulk subscribers (including DID trunk) VPT equipment (This would include Micro wave equipment, MARR equipment, Satellite base equipment) Switches • Local exchange (except line card) • SDCC transit switch / Local cum transit switch Short distance charging area (SDCA) network Transmission media and equipment • RSU to Local Exchange Transmission Link • Local exchange to local exchange link • Exchange to transit switch. • Interconnection link Switches • Trunk automated exchange level two (TAX 2) Intra-circle long distance network Transmission media and equipment • Transit switch to Transit switch link • Transit switch to TAX II link • TAX II to TAX II link • TAX II to TAX I link • Interconnection link Page 15 Network Network elements National Long Distance Service SDCA to LDCA • Transmission media (This would include Optical fibre, radio systems etc.) • Transmission equipment • Other assets LDCA to LDCA • Switching equipment (Tax level 1) • Switching equipment – other • Transmission media (This would include optical fibre, co axial cable, micro wave etc) • Transmission equipment • Other assets International Long Distance Service Transmission Transmission – domestic Transmission – International (This would include transmission equipment, satellite linkage, submarine cable etc.), region wise. • Circuit Switching Switching • Others (including Server, Router etc.) Cellular Mobile Telephone Service Core network Radio network (This should include elements from subscriber to MSC i.e. Base Switching Centre, Base Transceiver Station, Transmission Links – BSC – MSC, BTS – BSC) Rest of network (This should include MSC, MSC- MSC links, MSO to NLDO links, MSO to BSO links and MSO to ILDO links) Dedicated network � SMS server • GPRS Networking • Others VSAT Space segment Transponder Page 16 Network Network elements • TDMA • Hub • Antenna • Others Ground segment • DAMA • Hub • Antenna • Others Internet Service Central Network • International gateway • Shared Network Resources Node • Joint node network elements • Dedicated node network elements Access Connectivity • DEL /E1R2 (PSTN) connectivity • Local loop leased line • ISDN connectivity • DSL connectivity • Cable connectivity • Wireless network • Others Page 17 Schedule III Proforma A Profit and Loss Statement- Product Name of The Company- _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ Name of Service - _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ Licensed Area - _ _ _ _ _ _ _ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ Name of Product/Network Services- _ _ _ _ _ _ _ _ _ _ _ _ Period: _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Rs Lakhs Product Type ( refer note 2) Particulars A B C D E Total REVENUE (Net of Service TAX) ( refer note 1) ----- ---- Others Total Less: Pass through Less: License fee Less: License fee penalty, if any Net revenue COST Product direct cost Network cost Support functions/ department cost - Directly attributable - Indirectly attributable - Unattributable Total cost Profit/(Loss) Add Back : Return on Capital Employed charged on network elements Net Profit/(Loss) Replacement Cost Adjustment (refer note 4) Holding gain/Loss Supplementary Depreciation Change in Operating Cost due to replacement of assets Total adjustment Profit/Loss before interest and tax Total capital employed Net Profit/(Loss) as % of capital employed. Return on turnover(%) Note : 1 Each source of revenue of a products/network services should be separately shown. For example for product Access, Rental, Installation charges/connection, etc should be shown separately.

2. POTS, ISDN, Bulk, Leased Circuits are product types of Access. Details of Product types are given in Schedule I.

3. Adjustments in revenue and cost may be clearly shown in the statement. For example notional revenue adjustment on account of free calls may be shown.

4. Relevant for reporting on the basis of Replacement Cost Accounting. Page 18 Proforma B Profit and Loss Statement- Service Name of Company- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Service - _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ Licensed Area - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Period: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (Rs. Lakhs) Particulars Current year Previous year REVENUE (Net of service tax) REVENUE (refer note 1) ------ ---- Total Less : Pass through Less : License fees Less : License fee penalty if any Net revenue COST Employee cost Salaries and wages Contribution to provident fund and other funds Staff welfare Training and recruitment Others Sub-total Administration cost Rent Rates and taxes Insurance charges Communication costs Electricity Travel and conveyance expenses Legal and professional charges Printing and stationery Audit fees Others Sub-total Sales and marketing cost Advertisement and business promotion expenses Sales commission Provision for bad and doubtful debts Bad debts write off Others Sub-total Maintenance cost Annual maintenance charges Repairs and maintenance Buildings Plant and machinery Others Others Sub-total Page 19 (Rs. Lakhs) Particulars Current year Previous year Government charges Communication charges Expenses on amortization (license fee etc.) WPC charges-DOT Others Sub-total Network operating Cost Leased circuits Royalty for technical know how fees Power and fuel Interconnection Port charges Others Others Sub-total Depreciation Buildings Plant and machinery Others Sub-total Leased rentals Equipment Real estate Others Sub-total Other cost Loss on sale of fixed assets(net) Common cost Corporate office expenses Others Sub-total Finance charges Bank charges Others Sub-total Total cost Profit/ (Loss) before Interest & Tax Replacement Cost Adjustment (refer note 2) Holding gain/Loss Supplementary Depreciation Change in Operating Cost due to replacement of assets Total adjustment Profit/Loss before interest and tax Total capital employed Return on capital employed (%) Return on turnover (%) Note : 1 Each source of revenue of products should be separately shown. For example Rental, Installation charges/connection, call charges, leased lines, Port charges, interconnection charges etc. 2 Relevant for reporting on the basis of the Replacement Cost Accounting. Page 20 Proforma C Cost Sheet- Product Name of Company- _ _ _ _ _ _ _ _ _ _ _ _ Name of Service- _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Product - _ _ _ _ _ _ _ _ _ _ _ _ _ Name of licensed Area- _ _ _ _ _ _ _ _ _ _ Period- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (Rs Lakhs) Product Type ( refer note 1) A B C D Others Total DIRECT COST (I) Employee cost Salaries and wages Contribution to provident fund and other funds Staff welfare Training and recruitment Others Sub total Administration cost Rent Rates and taxes Insurance charges Communication costs Electricity Travel and conveyance expenses Legal and professional charges Printing and stationery Audit fees Others Sales and marketing cost Advertisement and business promotion expenses Sales commission Provision for bad and doubtful debts Bad debts write off Outsourcing Others Sub total Maintenance cost Annual maintenance charges Repairs and maintenance Buildings Plant and machinery Others Installation charges Others Sub total Depreciation Buildings Plant and machinery Others Sub total Page 21 (Rs Lakhs) Product Type ( refer note 1) A B C D Others Total Leased rentals Equipment Real estate Others Sub total Replacement Cost Accounting Adjustment (refer note 2) Holding gain/Loss Supplementary Depreciation Change in Operating Cost due to replacement of assets Total adjustment Total direct cost (I) NET WORK COST / Network Replacement Cost (refer note 2 below) ------- -------- ------- Total Network Cost (II) SUPPORT FUNCTION / DEPARTMENT COST or REPLACEMENT COST OF SUPPORT FUNCTIONS (refer note 2 below) ------ ------- ------- Total support function / department cost (III) Grand total (I) + (II) +(III) Note : (1) POTS, ISDN, BULK, LEASED Circuits, VPT, are product types of Access for Fixed Basic Telephone Service. Details of Products/Network services are given in Schedule I. List of products for which cost sheets is to be made should be clearly brought out in the manual.

(2) Replacement cost adjustment is to be used when report is made on the basis of Replacement Cost Accounting. Page 22 Proforma D Cost Sheet – Network Elements Name of Company- _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Service: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Network Element: _ _ _ _ _ _ _ _ __ Name of licensed Area- _ _ _ _ _ _ _ _ _ _ _ _ Period- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Rs Lakhs Direct cost Directly attributable cost Indirectly attributable cost Un-attributable cost Total NETWORK DIRECT COST Employee cost Salaries and wages Contribution to provident fund and other funds Staff welfare Training and recruitment Others Sub total Administration and other cost Rent Rates and taxes Insurance charges Communication costs Electricity Travel and conveyance expenses Printing and stationery Audit fees Others Sub total Maintenance cost Annual maintenance charges Repairs and maintenance Buildings Plant and machinery Others Installation charges Others Sub total Government charges Communication charges Expenses on amortization (license fee etc.) WPC charges-DOT Others Sub total Network operating cost Leased circuits Royalty for technical know how fees Power and fuel Interconnection charges - Port charges - Other charges Others Sub total Depreciation Page 23 Rs Lakhs Buildings Plant and machinery Others Sub total Leased rentals Equipment Real estate Others Sub Total Replacement Cost Adjustment (refer note iv) Holding gain/Loss Supplementary Depreciation Change in Operating Cost due to replacement of assets Total adjustment Total direct cost (I) COST TRANSFERRED FROM SUPPORT FUNCTIONS/ REPLACEMENT COST TRANSFERRED FROM SUPPOORT FUNCTIONS (refer note iv below) Administration Billing Branch office Corporate office Customer care Finance and accounts HR Insurance IT/EDP Legal / regulatory Maintenance Marketing & sales Planning and development Quality Stores / logistics Sub Total (II) COST OF CAPITAL EMPLOYED (III) Total Cost (I+II+III) Apportionment of Cost to Products Products Usage (No. of subscribers/ usage minutes etc.) Cost allocated to product Main Product I � Sub product A � Sub Product B � � Others Main Product II � Sub Product a � Sub Product b � Total Note: (i) Illustrative list of network elements is at Schedule II. This list is based on a network architecture which may not be relevant for all service providers. The list should be suitably modified and clearly indicated in the manual.

(ii) Separate cost sheet to be generated for each of the Network Element.

(iii) List of products/network services is at Schedule I. POTS, VPT, ISDN, Leased Lines, Bulk are product types of Access.

(iv) Replacement Cost Adjustment is relevant for reports prepared under Replacement Cost Accounting.

(v) Statement of computation of pre-tax WACC should be attached. Page 24 Proforma E Statement of Network Element Cost Summary Sheet Name of Company- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Service - _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ Licensed Area - _ _ _ _ _ _ _ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ Period- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ Rs lakhs Network Cost ( Historical Cost Basis) Replacement Cost Adjustment (Refer note 2 below) Cost drivers Cost Per driver (Rs.) Network elements O&M Depreciation RoCE Total cost Replacement Cost Adjustment RoCE Adjustment Total Cost Based on Replacement cost Note: (1) In the ‘Statement of Total Capital Employed’ and the ‘Network Cost Sheet’, the RoCE represents the weighted average cost of capital employed multiplied by average capital employed.

(2) Replacement Cost Columns to be added for reports prepared on the basis of Replacement Cost Accounting. Page 25 Proforma F Statement of Allocation of Network Cost Transferred to Products/ Network Services Name of Company- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Service - _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ Name of Product- _ _ _ _ _ __ __ _ _ _ _ _ _ _ _ _ _ _ _ _ Licensed Area - _ _ _ _ _ _ _ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ Accounting Base ( refer note 3)- Historical Cost or Replacement Cost Period - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Rs. In lakhs Product Type ( refer note 1) A B C D E Total Network Elements (refer note 2) Rate/ unit (Rs.) Units Cost A Unit Cost B Units Cost C Units Cost D Units Cost E Cost (A+B+C+D+E) Note : 1. POTS, ISDN, Bulk, Leased Circuits are product types of Access. Details of Product types are give in Schedule I.

2. The illustrative network elements defined in Schedule II assume certain network design. Therefore these network elements may not be fully relevant or applicable to all operators. Keeping in view of the principles followed, each service provider shall work out the specific network elements as relevant to its architecture.

3. Forms shall clearly indicate whether the report is prepared on the basis of Historical Cost Accounting or the Replacement Cost Accounting. Page 26 Proforma G Statement of Capital Employed Name of Company- __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Service - _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ Licensed Area - _ _ _ _ _ _ _ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ Period-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Rs Lakhs Current Year Previous year FIXED ASSETS – (GROSS BOOK VALUE) Network Elements (Historical cost) Other (refer note 1) Adjustment for replacement cost of Assets (refer note 4) Total/ Net Replacement Cost (refer note 4) Network Elements (Historical cost) Other Adjustment for replacement /Revaluation of Assets (refer note 4) Total/ Net replacem ent cost (refer note 4) Tangible Assets Land Building Plant and machinery Computers Office equipment Furniture and fixtures Vehicles Intangible Assets License Patents / technical know how Total fixed assets Less : Accumulated depreciation NET BOOK VALUE (I) Capital Work in Progress (II) CURRENT ASSETS Inventories Cash and bank balance Debtors Loans and advances Others Sub total CURRENT LIABILITIES Sundry creditors Provisions, etc. Security deposit Advance rentals Sub total NET WORKING CAPITAL (III) Page 27 TOTAL CAPITAL EMPLOYED (I+II+III) RETURN ON CAPITAL EMPLOYED (WACC x Average Capital employed) Note : 1 Others would include all items other than network Elements.

2. WACC –s Pre-tax Weighted average cost of capital.

3. Average Capital Employed is the average of capital employed at the beginning and closing of the Accounting period.

4. Replacement cost Adjustment and Net Replacement Cost is relevant for reports prepared on the basis of Replacement Cost Accounting. Page 28 Proforma H Allocation of Capital Employed Name of Company- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Service - _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ Licensed Area - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Period - ___ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ Rs Lakhs Note: Replacement Cost of fixed assets is relevant for reports prepared on the basis of Replacement Cost Accounting. Network Elements Historical cost of Fixed assets – Net Book Value/ Replacement Cost of fixed assets-Net Book Value (Refer Note below) Allocation of capital employed in the ratio of fixed assets ----- ---- ----- Total Page 29 Proforma I Format for Fixed Asset/ Depreciation Statement Name of Company: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Name of Service- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Licensed Area- _ _ _ _ _ _ __ _ __ __ __ _ _ __ Accounting Base ( refer note 2)- Historical Cost or Replacement Cost Period- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Gross Block/Depreciation/Net Block (Rs lakhs) Land Building Plant and machinery Comp uters Office equipment Furniture and fixtures Vehicles License Patents / Technical know how Total NETWORK ELEMENTS --- --- --- Sub Total (A) PRODUCTS --- --- ----- Subtotal ( B) SUPPORT FUNCTION/ DEPARTMENT Administration Billing Branch office Corporate office Customer care Finance and accounts HR Insurance IT/EDP Legal / regulatory Maintenance Marketing and sales Planning and development Quality Stores / logistics Sub Total ( c) Total ( a+b+c) Note: (1) Separate Forms for Fixed Asset ( Gross Block/ Net Block) and Depreciation.

(2) Form shall be specifically mention whether it is prepared on Historical cost basis or replacement cost Page 30 Proforma J Reconciliation Statement – Profit and Loss Statement (Rs. lackhs) RECONCILIATION STATEMENT – PROFIT & LOSS ACCOUNT Item Revenue Cost Net Profit /loss Service 1 Geographical area 1 Geographical area 2 --- Sub total Service 2 Geographical area 1 Geographical area 2 --- Sub total Service 3 Geographical area 1 Geographical area 2 --- Sub total Service 4 Geographical area 1 Geographical area 2 ---- Sub total Total XXX Adjustments Return on capital employed on network elements Non regulated business Elimination of inter business transactions Non relevant items − Return on investments − Non operating income − Interest costs − Corporate Tax − Other taxes (if any) − Amortisation of goodwill − Extra- ordinary items – such as abnormal loss due to fire/ theft etc. − Others Unallocated items Any other items (specify the details) Sub total Total as per audited accounts Note: Return on capital employed considered in network cost is eliminated to reconcile the profit / loss with book profit / loss Page 31 Proforma K Reconciliation Statement – Statement of Capital Employed Rs Lakhs Item Capital employed Service 1 Geographical area 1 Geographical area 2 ---- Sub total Service 2 Geographical area 1 Geographical area 2 ----- Sub total Service 3 Geographical area 1 Geographical area 2 ------ Sub total Service 4 Geographical area 1 Geographical area 2 ----- Sub total Total Adjustments For non regulated business Elimination of inter business assets / liabilities Non relevant items − Investments − Deposits - Inter corporate, etc. − Goodwill − Provision for tax − Proposed dividend − Long term borrowings − Others Unallocated items Any other items (specify the details) Sub total Total as per audited accounts Page 32 Proforma L Non-Financial Information for Basic Telephone Service I . Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details of tariff schemes applicable during the year

2.1.1 Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, call charges, Leased circuit charges, etc.

2.1.2 Also, mention the duration of the above scheme.

2.1.3 Please provide details of the discounting policies/promotional Scheme.

2.1.4 Minutes of Usage under each of the tariff plan

2.2 Details of DELs

2.2.1 Total Capacity of DELs

2.2.2 Number of subscribers

2.2.3 Total number of working lines and capacity utilisation (in %)

2.2.4 No. of DELs with STD facility

2.2.5 No. of DELs with STD/ISD facility

2.2.6 STD PCOs

2.2.7 Local PCOs

2.2.8 VPT

2.3 Average revenue per subscriber Average Revenue Details (including call charges and rentals) Current year Previous Year Revenue in Rs. per month No. of lines No. of lines Upto 100 101 – 250 251 – 500 501 – 1000 Page 33 1001 – 2000 2001 – 5000 Above 5000

2.4 Total calls from Local and STD/ISD PCOs separately ( in terms of revenue and minutes of calls )

2.5 Average holding time per subscribe � Intra SDCA calls � Intra-circle long distance calls o Upto 50 kms o 50-200 kms o 200-500 kms o Above 500 kms � Inter circle long distance call o Upto 50 kms o 50-200 kms o 200-500 kms o Above 500 kms � ILD calls � CMTS calls in same circle � CMTS calls in other circle

2.6 Break up of Revenue into Urban and Rural areas (Rs in lacs) Particulars Urban Rural Total Subscribers (Nos.) Revenue: Rentals Product 1 Product2 -- Total III. Network Information

3.1 Network overview chart Describe the overall network architecture on a geographical map of the service area with a brief written description. The map should indicate all the network locations with appropriate symbols describing exchange, transmission, and interconnection with other operators etc. Page 34 SWITCHES

3.2 Number of exchanges

3.2.1 Provide full list of exchanges indicating location, SDCA, LDCA, type of exchange, make and model, capacity, signaling protocol and other details

3.2.2 Provide details as above for SDCC transit/tandem switches in circle

3.2.3 Provide list of intra-circle (Level I and II trunk automatic) exchanges indicating type of exchange, make and model, capacity, signaling protocol and other details

3.3 Number of SDCA Exchanges

3.3.1 Urban Exchanges

3.3.2 Rural Exchanges

3.3.3 Total ACCESS

3.4 Number of subscribers for each type of access

3.4.1 PSTN

3.4.2 WLL-F

3.4.3 ISDN

3.4.4 Bulk (Franchisees)

3.4.5 WLL-M

3.4.6 VPT Note: One subscriber should figure in one type of access only. E.g. VPT figures should not be part of PSTN. TRANSMISSION

3.5 Intra-SDCA level (for each type such as) consolidated at circle level

3.5.1 Copper Cable (Indicate total route kilometres for each capacity separately)

3.5.2 OFC Systems (Indicate total route kilometres for each capacity separately)

3.5.3 Microwave (Indicate total route kilometres for each capacity separately)

3.5.4 Others

3.6 Inter SDCA Intra-circle level (for each type such as) consolidated at circle level

3.6.1 Copper Cable (Indicate total route kilometers for each capacity separately) Page 35

3.6.2 OFC Systems (Indicate total route kilometers for each capacity separately)

3.6.3 Microwave (Indicate total route kilometers for each capacity separately)

3.6.4 Others INTERCONNECTION

3.7 Details of POIs with other operators at

3.7.1 SDCA

3.7.2 Intra-circle level II TAXs

3.7.3 Intra-circle level I TAXs

3.8 Interconnection infrastructure/ Number of ports at SDCA for Interconnection with other

3.8.1 BSOs

3.8.2 MSOs

3.8.3 NLDOs

3.8.4 ILDOs

3.8.5 Specify, if any other Level II LDCAs for Interconnection with other

3.8.6 BSO

3.8.7 MSO

3.8.8 NLDO

3.8.9 ILDO

3.8.10 Specify, if any other Level I LDCAs for Interconnection with other

3.8.11 BSOs

3.8.12 MSOs

3.8.13 NLDOs

3.8.14 ILDOs

3.8.15 Specify, if any other NETWORK ROLLOUT PLAN FOR NEXT ONE YEAR SDCA Network as consolidated at circle level

3.9 No. of new switches planned

3.10 New access lines planned

3.10.1 PSTN

3.10.2 WLL-F

3.10.3 ISDN Page 36

3.10.4 Bulk (Franchisees)

3.10.5 WLL-M

3.10.6 VPT

3.11 Transmission planned (Indicate total route kilometers for each capacity separately)

3.11.1 Copper Cable (ckm)

3.11.2 OFC Systems � Route kms � System kms

3.11.3 Microwave

3.11.4 Others

3.12 New POIs planned

3.13 New VPTs and PCOs planned Inter-SDCA Intra-circle long distance network as consolidated at circle level

3.14 No. of new Switches planned

3.15 Transmission planned (Indicate total route kilometers for each capacity separately)

3.15.1 OFC Systems � Route kms � System kms

3.15.2 Microwave

3.15.3 Others

3.16 New POIs planned IV . Traffic Details SWITCHING

4.1 Traffic handling capacity for Intra-SDCA and Inter-SDCC Intra-circle Network ( in Erlangs) as consolidated at circle level

4.2 Capacity utilisation of traffic handling ( in % ) for Intra-SDCA and Inter- SDCA Intra circle network as consolidated at circle level TRANSMISSION

4.3 Capacity detail

4.3.1 Total owned capacity ( route kilometers for each bandwidth capacity)

4.3.2 Leased Transmission ( route kilometers for each bandwidth capacity)

4.3.3 Capacity Leased out ( route kilometers for each bandwidth capacity) Page 37 USAGE MINUTES

4.4 Number of metered units (MCUs) consolidated at circle level covering all exchanges for the following distance slabs Distance Slab Own Network To other BSOs To NLDOs To ILDOs Local Calls Upto 50 kms 51-200 kms 201-500 kms Above 500 kms

4.5 Traffic in erlangs consolidated at circle level covering all exchange for the following distance slabs Distance Slab Own Network To other BSOs To NLDOs To ILDOs Local Calls Upto 50 kms 51-200 kms 201-500 kms Above 500 kms

4.6 Minutes of usage (outgoing) consolidated at circle level from all exchanges in the circle Distance Slab Own Network To other BSOs To NLDOs To ILDOs Local Calls Upto 50 kms 51-200 kms 201-500 kms Above 500 kms

4.7 Minutes of usage (incoming) consolidated at circle level from all exchanges in the circle

4.7.1 Own Network

4.7.2 From other BSOs

4.7.3 From NLDOs

4.7.4 From ILDOs

4.8 Minutes of usage for each product under WLL limited mobility

4.8.1 Local Call

4.8.2 WLL to WLL Page 38

4.8.3 Intra circle *

4.8.4 National long distance*

4.8.5 International long distance

4.8.6 Wholesale

4.8.7 Others * Minutes break-up covering applicable distance slab to be given.

4.9 On a sample basis , number of metered call units, traffic in Erlangs and Minutes of Usage for each hour within a 24 hour period for each day of a week selected for this purpose

4.10 Average duration per call ( in minutes)

4.11 Average number of metered call units (MCU) per DEL

4.12 Average number of Minutes of Usage per Del � Local Calls � Intra-circle Long Distance Calls � Inter-circle Long Distance calls � International Long Distance calls INTERCONNECTION

4.13 Minutes of usage (outgoing/incoming traffic) as consolidated at Circle level for all intra-SDCA calls to other Outgoing Incoming BSOs MSOs NLDOs ILDOs Others

4.14 Minutes of usage (outgoing/incoming traffic) as consolidated at Circle level for interconnection at Level II TAX from other Outgoing Incoming BSOs MSOs NLDOs ILDOs Others Page 39 Proforma M Non-Financial Statement for National long Distance Service I . Basic information Sheet Information as of (date)

1.1 List of services/products

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details of tariff schemes

2.1.1 Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation charges etc.

2.1.2 Also, mention the duration of the above scheme.

2.1.3 Please provide details of the details of the discounting policies, if any.

2.2 No. of subscribers (if any for direct billing by NLDO). III. Network Information

3.1 Network overview chart Describe the overall network architecture on a geographical map of the service area with a brief description. The map should indicate all the network locations with appropriate symbols describing exchange, transmission, interconnection with other operators etc. SWITCHES

3.2 Number of exchanges

3.2.1 (Please provide list of exchanges indicating type of exchange, make and model, capacity, signaling protocol and other details) Page 40 TRANSMISSION

3.3 Media (for each type such as)

3.3.1 OFC Systems (Indicate total route kilometers for each capacity separately)

3.3.2 Microwave (Indicate total route kilometers for each capacity separately)

3.3.3 Others INTERCONNECTION

3.4 Details of POIs with other operators

3.5 Interconnection infrastructure/ Number of ports for Interconnection with

3.5.1 BSOs

3.5.2 MSOs

3.5.3 NLDOs, others if any

3.5.4 ILDOs

3.5.5 Specify, if any other NETWORK ROLLOUT PLAN FOR NEXT ONE YEAR

3.6 No. of new switches planned

3.7 Transmission planned (Indicate total route kilometers for each capacity separately)

3.7.1 OFC Systems

3.7.2 Microwave

3.7.3 Others

3.17 New POIs planned. IV . Traffic Details SWITCHING

4.15 Traffic handling capacity (in Erlangs)

4.16 Capacity utilisation in traffic handling (in %) TRANSMISSION

4.17 Capacity details

4.17.1 Total owned capacity ( route kilometers for each bandwidth capacity)

4.17.2 Leased Transmission ( route kilometers for each bandwidth capacity)

4.17.3 Capacity Leased out ( route kilometers for each bandwidth capacity) Page 41 USAGE MINUTES

4.18 Distribution of domestic long distance metered call according to different STD distance categories at half-hourly intervals throughout the day.

4.19 Minutes of usage for each product – separately for Incoming and outgoing traffic Carriage covering Distance Slabs To NLDOs, if any To BSOs To MSOs To ILDOs From NLDos, if any From BSOs From MSOs From ILDOs Leased Upto 50 kms 51-200 kms 201- 500 kms Above 500 kms Page 42 Proforma N Non-Financial Statement for International Long Distance Service I. Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details of tariff schemes applicable during the year

2.1.2 Also, mention the duration of the above scheme.

2.1.3 Please provide details of the discounting policies, if any. III . Network Information

3.2 Number of exchanges

3.2.1 Please provide list of exchanges indicating type of exchange, capacity, signaling protocol and other details TRANSMISSION

3.3 Transmission international

3.3.1 Region wise bandwidth details for each type of transmission media (including satellite linkage, submarine cable etc.)

3.3.2 Regions should be same as mentioned in main formats Page 43

3.4 Transmission Domestic

3.4.1 Copper Cable (Indicate total route kilometres for each capacity separately)

3.4.2 OFC Systems (Indicate total route kilometers for each capacity separately)

3.4.3 Microwave (Indicate total route kilometers for each capacity separately)

3.4.4 Others INTERCONNECTION

3.5 Details of POIs with other operators

3.6 Interconnection infrastructure/ Number of ports for Interconnection with

3.6.1 BSO

3.6.2 MSO

3.6.3 NLDO

3.6.4 ILDO

3.6.5 Specify, if any other

3.7 Network rollout plan for next one year

3.8 No. of new switches planned

3.9 Domestic transmission planned

3.9.1 OFC systems

3.9.2 Microwave

3.9.3 Others

3.10 International transmission planned

3.10.1 Region wise new bandwidth planned ( Mention sattellite and submarine cable separately)

3.11 New POIs planned. IV . Traffic Details SWITCHING

4.1 Traffic handling capacity (in Erlangs)

4.2 Capacity utilisation for traffic handling (in %) TRANSMISSION

4.3 Capacity details

4.3.1 Total capacity ( in bandwidth)

4.3.2 Capacity leased Page 44

4.3.3 Capacity used USAGE MINUTES

4.4 Details of incoming and outgoing number of minutes of ISD calls separately for each country category.

4.5 For each half an hour of the day, number of minutes of calls made to each country category, and number of minutes of calls received from each country category.

4.6 For each half an hour of the day, number of minutes of calls to all TAXs covered under each of the Level I TAXs stations: � Outgoing � Incoming

4.7 Minutes of Usage Carriage covering Distance Slabs To ILDO, if any To BSOs To MSOs To NLDOs From BSOs From MSOs From NLDOs From ILDOs Upto 50 kms 51-200 kms 201-500 kms Above 500 kms Total Page 45 Proforma O Non-Financial Statement for Cellular Mobile Telephone Service I . Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details of tariff schemes applicable during the year

2.1.2 Also, mention the duration of the above scheme.

2.1.3 Please provide details of the discounting policies, if any.

2.1.4 Minutes of Usage under each of the tariff plan

2.2 Number of subscribers (Please mention opening, closing and average number of subscribers for the year)

2.2.1 Pre Paid

2.2.2 Post Paid

2.2.3 Total Subscribers

2.2.4 Roaming subscribers

2.2 Please mention rural and urban SDCA’s separately in which one or more BTS are located

2.3 Average retail revenue per subscriber Average Revenue Details (including Airtime charges and rentals for both Prepaid and Postpaid) Current year Previous Year Revenue in Rs per month No. of subscribers No. of subscribers Upto 400 Page 46 401 – 600 601 – 800 801 – 1000 1001 – 1500 1501 – 2000 2001 – 5000 Above 5000

2.4 Average revenue per user (for post paid and pre paid subscribers separately)

2.5 Wholesale Interconnection total revenue for MSO (operator wise details) III . Network Information

3.1 Network overview chart Describe the overall network architecture on a geographical map of the service area with a brief written description. The map should indicate all the network locations with appropriate symbols describing switches, transmission, interconnection with other operators etc. NETWORK CAPACITY ( in erlangs )

3.2 Opening capacity

3.3 Closing capacity SWITCHES / TRANSMITTER STATIONS

3.4 Number of MSCs, BSCs and BTS (Provide locationwise list of MSCs, BSCs and BTSs indicating type of MSC, make and Model, capacity, frequency and other details ) TRANSMISSION

3.5 Media including terminal equipment for each type such as

3.5.1 Copper Cable (Indicate total route kilometers for each capacity separately)

3.5.2 OFC Systems (Indicate total route kilometers for each capacity separately)

3.5.3 Microwave (Indicate total route kilometers for each capacity separately)

3.5.4 Others

3.6 WPC details

3.6.1 Existing Frequency

3.6.2 Spot Frequency

3.6.3 Frequency Allocated

3.6.4 Number Of Users Page 47 INTERCONNECTION

3.7 Details of POIs with other operators

3.8 Interconnection infrastructure/ Number of ports ( operator wise details) for Interconnection with

3.8.1 BSOs

3.8.2 MSOs (other)

3.8.3 NLDOs

3.8.4 ILDOs

3.8.5 Specify, any other NETWORK ROLLOUT PLAN FOR NEXT ONE YEAR

3.9 No. of new switches planned ( including Type ,Location , DOC, Make, Model &Version, Technology Used, Capacity, Cost, Number of Cities covered, Distance in Kilometers (Highway Route) along with map)

3.10 Transmission

3.10.1 Terminal Equipment / Regenerator (Type, cost, (fixed) etc.)

3.10.2 Backbone Media (Type, cost (variable)

3.10.3 Route Name

3.10.4 Type of Backbone

3.10.5 Route Length

3.10.6 DOC

3.10.7 Capacity

3.10.7.1 Installed

3.10.7.2 Utilized

3.10.7.3 Spare

3.10.7.4 Ultimate

3.11 Network roll out-network management control centres (NMCC)

3.11.1 Existing

3.11.2 Number of NMCC Introduced

3.11.3 Percent of Network brought on TMN

3.11.4 Number of digital cross connects and Intelligent MUXes

3.11.5 Number of managed leased line networks.

3.12 Network roll out – interconnection (POI wise details)

3.12.1 Distance of MSC from POI

3.12.2 Name / Id of Switching Center

3.12.3 DOC Connected with Page 48

3.12.4 Type of Exchange (Local/Tandem/Tax)

3.12.5 Service Provider

3.12.6 Capacity of connection (Number of Junctions)

3.12.7 Media

3.12.8 Average busy hour Traffic (Erlangs)

3.12.9 Cost. IV . Traffic Details SWITCHING

4.1 Traffic handling capacity (in Erlangs)

4.2 Capacity utilisation in traffic handling (in %) USAGE MINUTES

4.3 Average duration per call (in minutes)

4.4 Average number of calls per subscriber

4.5 Minutes of usage for each product for the year –for originating/terminating traffic Billed Duration Own Other Operator Own Other Operator

4.5.1 Pre paid Own Others

4.5.1.1 Mobile to PSTN

4.5.1.2 Mobile to Mobile (within circle same operator)

4.5.1.3 Mobile to Mobile (within circle other operator)

4.5.1.4 Mobile to Mobile (other circle)

4.5.1.5 MSO to NLDODistance Slab � Upto 50 kms � 51-200 kms � 201-500 kms � Above 500 kms

4.5.1.6 MSO to ILDO Distance Slab � Upto 50 kms � 51-200 kms � 201-500 kms Page 49 � Above 500 kms

4.5.1.7 Roaming

4.5.1.8 SMS

4.5.1.9 Others, if any

4.5.2 Post paid

4.5.2.1 Mobile to PSTN

4.5.2.2 Mobile to Mobile (within circle same operator)

4.5.2.3 Mobile to Mobile (within circle other operator)

4.5.2.4 Mobile to Mobile (other circle)

4.5.2.5 MSO to NLDO Distance Slab � Upto 50 kms � 51-200 kms � 201-500 kms � Above 500 kms

4.5.2.6 MSO to ILDO Distance Slab � Upto 50 kms � 51-200 kms � 201-500 kms � Above 500 kms

4.5.2.7 Roaming

4.5.2.8 SMS

4.5.2.9 Others, if any

4.5.3 GPRS

4.5.4 Others * As Usage minute of SMS cannot be captured directly, they should be approximated using appropriate engineering studies.

4.6 Minutes of usage for each product for the year –for wholesale (Interconnection) traffic

4.6.1 From BSO to MSO

4.6.2 From NLDO to MSO

4.6.3 From ILDO to MSO. Page 50 Proforma P Non-Financial Statement for VSAT Service I . Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details of tariff Schemes applicable during the year

2.1.1 Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, Leased circuit charges, etc.

2.1.2 Also, mention the duration of the above scheme.

2.1.3 Please provide details of the discounting policies, if any.

2.2 No. of subscribers

2.1.4 Number of closed user groups

2.3 Coverage

2.1.5 Urban

2.1.6 Rural III . Network Information

3.2 Space segment – capacity (MHZ)

3.2.1 C Band – INSAT

3.2.2 KU Band – INSAT

3.2.3 KU Band - Foreign satellite

3.3 Location of earth stations

3.4 Total number of VSAT installed and capacity

3.4.1 C Band

3.4.2 KU Band – INSAT

3.4.3 KU Band - Foreign satellite

3.5 WPC details

3.5.1 Frequency band allocated

3.6 Availability of network in Percentage (%)

3.6.1 MTBF/MTTR

3.7 System Description

3.7.1 Satellite Constellation and Orbital Characteristics

3.7.2 Earth Stations

3.7.3 User Terminal(s)

3.8 Roll out plan/upgradation plan for next one year. Page 52 Proforma Q Non-Financial Statement for Radio Paging Service I . Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details Of Tariff Schemes applicable during the year

2.1.1 Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, etc.

2.1.2 Also, mention the duration of the above scheme.

2.1.3 Please provide details of the discounting policies, if any.

2.2 Price for Pager Instrument used for Radio paging service

2.2.1 Alphanumeric Pager

2.2.1.1 Single Line Pager

2.2.1.2 2 Line Pager

2.2.1.3 4 Line Pager

2.2.1 Numeric Pager

2.2.1.1 Single Line Pager

2.2.1.2 2 Line Pager

2.2.1.3 4 Line Pager Standard Alternative

2.3 Number of Subscribers Package

2.3.1 Circle Page 53

2.2.1.1 Alphanumeric

2.2.1.2 Numeric

2.3.2 City

2.2.2.1 Alphanumeric

2.2.2.2 Numeric

2.3.3 Total

2.4 Number of Subscribers

2.3.1 Individual

2.3.2 Closed Users

2.3.3 Corporate Clients III . Network Information

3.2 WPC details

3.2.1 Frequency Band Applied For

3.2.2 Frequency Allocated

3.2.3 Royalty Fee

3.2.4 License Fee

3.2.5 Number of Users

3.2.6 Constraints

3.3 Equipment Wise Details including Type, Location, Date of Commissioning (DOC), Make, Model & Version, Technology Used (Digital / Analog ), Total Capacity, Capacity Utilized

3.3.1 Tx sites etc.

3.3.2 Paging Control Terminals

3.3.3 EPABX/Automatic Call Device

3.3.4 Headsets /Seats

3.3.5 Others

3.4 Roll out/ upgradation plan. Page 54 Proforma R Non-Financial Statement for PMRTS I . Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue All the information is to be provided for Current Year and Previous Year

2.1 Details of tariff Schemes applicable during the year

2.1.1 Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs etc.

2.1.2 Also, mention the duration of the above schemes.

2.1.3 Please provide details of the discounting policies, if any.

2.2 Please provide details of price of PMRTS Instruments / Equipments

2.3 No. of closed user groups. III . Network Information All the information is to be provided for Current Year and Previous Year.

3.2 WPC details

3.2.1 Allocated frequency

3.3 Equipment wise details including Type, Location, Date of Commissioning (DOC), Make, Model & Version, Technology Used (Digital / Analog ), Total Capacity , Capacity Utilized (Provide Separately for Flex 1600 bps, Flex 3200 bps, Flex 6400 bps)

3.3.1 Transmission sites

3.3.2 PSR positions

3.3.3 PCM link OAP

3.3.4 PCM link Auto

3.4 Upgradation details

3.4.1 Transmitter Power

3.4.2 Details on Leased Lines

3.4.3 UHF Levels

3.4.4 Call Collection Network

3.4.5 Others

3.4.6 POCSAG

3.4.7 FLEX

3.5 Interconnection if any Page 56 Proforma S Non-Financial Statement for GMPCS I . Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details of tariff Schemes applicable during the year

2.1.1 Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs etc.

2.1.2 Also, mention the duration of the above schemes.

2.1.3 Please provide details of the discounting policies, if any.

2.2 Please provide details of price of GMPCS Instruments / Equipments

2.3 No. of subscribers. III . Network Information

3.2 WPC details

3.2.1 Allocated frequency Page 57

3.3 Equipment wise details including Type, Location, Date of Commissioning (DOC), Make, Model & Version, Technology Used (Digital / Analog ), Total Capacity , Capacity Utilized

3.4 Interconnection if any

3.5 Rollout plan / upgradation plans. Page 58 Proforma T Non-Financial Statement for Internet Service I . Basic Information Sheet Information as of (date)

1.1 List of services/products provided including Value added services

1.2 License No.

1.3 License Date

1.4 Service Area licensed

1.5 License Period

1.6 Date of Commencement of service

1.7 Company incorporation details

1.8 Related companies in the telecom sector In case there is a change in information as compared to previous year, please highlight the same. II . Tariff / Revenue

2.1 Details of tariff schemes applicable during the year

2.1.2 Please Also, mention the duration of the above scheme.

2.1.3 provide details of the discounting policies, if any.

2.2 Service wise number of subscribers

2.2.1 PSTN Dial Up

2.2.2 ISDN Dial Up

2.2.3 DSL

2.2.4 Cable

2.2.5 Wireless

2.2.6 Leased Circuit Copper

2.2.7 Leased Circuit Fiber

2.2.8 Cyber Cafes

2.2.9 Others

2.3 Income through Cyber Cafes: Page 59 III . Network Information

3.1 Network overview chart Describe the overall network architecture on a geographical map of the service area with a brief written description. The map should indicate all the network locations with appropriate symbols describing International Gateways, ISP nodes, transmission, interconnection with other operators etc.

3.2 Number of ISP nodes as on date

3.3 Details of international gateways (Please specify type of gateway, whether Owned /Leased, No. of landing stations /satellite gateways and Allocated frequency band for Satellite gateways)

3.4 Bandwidth details

3.4.1 International Bandwidth ( Uplink/downlink)

3.4.2 Domestic Bandwidth ( Uplink/downlink)

3.4.3 Total Bandwidth ( Uplink/downlink)

3.5 Total bandwidth (domestic and International combined ) allocation (type of service)

3.5.1 PSTN Dial Up

3.5.2 ISDN Dial Up

3.5.3 DSL

3.5.4 Cable

3.5.5 Wireless

3.5.6 Leased Circuit Copper

3.5.7 Leased Circuit Fiber

3.5.8 Others

3.5.9 Balance Bandwidth ( if any)

3.6 Nodewise allocation of total bandwidth

3.7 Network expansion plans

3.7.1 International Gateway

3.7.2 New Cities/ Nodes

3.7.3 New types of Access INTERCONNECTIONS

3.8 Details of POIs with other ISP operators.

3.9 Whether connected to NIXI Telecom Regulatory Authority of India Notification New Delhi, the 24 th May 2004 No.: 414-7/99 – FA In exercise of the powers conferred upon it under Section 36 read with clause (i) of sub-section 1(b) of Section 11 of the Telecom Regulatory Authority of India Act, 1997 as amended by Telecom Regulatory Authority of India (Amendment) Act, 2000, the Telecom Regulatory Authority of India, Service Providers (Maintenance of Books of Accounts and Other Documents) Rules, 2002 and the order/notification issued there-under, the Telecom Regulatory Authority of India hereby makes the following Regulation: The Reporting System on Accounting Separation (First Amendment) Regulation, 2004 (8 of 2004) Section I

1. Short title, extent and commencement: - (1) This Regulation shall be called “The Reporting System on Accounting Separation (First Amendment) Regulation, 2004”.

(2) The Regulation shall come into force on the date of its publication in the Official Gazette. Section II Telecom Regulatory Authority of India Notification New Delhi, the 30th September 2004 No.: 414-7/99 – FA In exercise of the powers conferred upon it under Section 36 read with para (i) of clause (b) sub-section (1) of Section 11 of the Telecom Regulatory Authority of India Act, 1997, the Telecom Regulatory Authority of India Service Providers (Maintenance of Books of Accounts and Other Documents) Rules, 2002 and the order/notification issued thereunder, the Telecom Regulatory Authority of India hereby makes the following Regulation namely:

1. Short title, extent and commencement: - I. This Regulation shall be called “The Reporting System on Accounting Separation (Second Amendment) Regulation, 2004 (12 of 2004)”. II. The Regulation shall come into force on the date of its publication in the Official Gazette.

2. In sub-regulation (1) of regulation 5 of the Reporting System on Accounting Separation Regulation, 2004 (4 of 2004), the following proviso shall be inserted namely; “Provided that during the first year from coming in the force of the Reporting System on Accounting Separation Regulation, 2004 (4 of 2004) the service providers shall submit audited reports within nine months of the end of accounting year to the Authority.”

3. Explanatory Memorandum This Regulation contains at Annexure A, an Explanatory Memorandum that explains the background and reasons for issuance of this regulation. BY ORDER [INDU LIBERHAN] Principal Advisor (FA&IFA) Annexure A EXPLANATORY MEMORANDUM

1. The Reporting System on Accounting Separation Regulation, 2004 issued on 23rd February 2004 had initially envisaged the submission of Accounting Separation Reports with the Authority within six months of the end of accounting year.

2. The Authority received several representations from various service providers expressing their inability to submit the Accounting Separation Reports by the above stipulated time and sought an extension of the same.

3. The Authority considered the representations of the service providers and decided that the time period be extended by 3 months during the first year of the Regulation. Accounting Separation reports shall, therefore, be submitted to the Authority within nine months of the end of accounting year. From the next year submission period shall continue to be six months from the end of the accounting year. Telecom Regulatory Authority of India A-2/14, Safdurjang Enclave, New Delhi-110029 Notification No. 16-6/2005-FA March 4, 2005 In exercise of the powers conferred by section 36 read with para (i) of clause (b) of subsection (1) of section 11 of the Telecom Regulatory Authority of India Act, 1997 and the Telecom Regulatory Authority of India, Service Providers (Maintenance of books of Accounts and Other Documents) Rules, 2002, and the order/ notification issued there under, the Telecom Regulatory Authority hereby makes the following regulation, namely-

1. Short title extent and commencement: -

(i) This Regulation may be called “The Reporting System on Accounting Separation (Third Amendment) Regulation, 2005 ” ( 6 of 2005).

(ii) It shall come into force on the date of its publication in the Official Gazette. Deletion of Regulation 7

2. Regulation 7 and the entries relating thereto of the Reporting System on Accounting Separation Regulation, 2004, dealing with confidentiality, are hereby deleted. Explanatory Memorandum

3. This Regulation contains at Annexure an Explanatory Memorandum that explains the background and reasons for issuance this regulation. By order (Harsha Vardhana Singh) Secretary cum Principal Advisor Annexure Explanatory Memorandum Telecom Regulatory Authority of India has made a comprehensive Regulation on confidentiality of information provided to it, as such there is no necessity of having similar provisions in the Reporting System on Accounting Separation regulation, 2004, and therefore the relevant provision has been deleted. Telecom Regulatory Authority of India Notification New Delhi, the 27th March 2006 No.: 16-31/2004-FA: In exercise of the powers conferred upon it under Section 36 read with para (i) of clause (b), sub-section (1) of Section 11 of the Telecom Regulatory Authority of India Act, 1997, the Telecom Regulatory Authority of India, Service Providers (Maintenance of Books of Accounts and Other Documents) Rules, 2002 and the order/notification issued thereunder, the Telecom Regulatory Authority of India hereby makes the following Regulation namely:

1. Short title, extent and commencement: -

(i). This Regulation shall be called “The Reporting System on Accounting Separation (Forth Amendment) Regulation, 2006 (4 of 2006)”.

(ii) The Regulation shall come into force on the date of its publication in the Official Gazette.

2. In regulation 1 under Section I of the Reporting System on Accounting Separation Regulation, 2004, for clause (2) and contents thereof, the following shall be substituted, namely: “(2) This Regulation shall apply to every service provider, which is engaged in any one or more of the following telecommunication activities, namely: -

(i) Basic Telephone Service;

(ii) National Long Distance Service;

(iii) International Long Distance Service;

(iv) Cellular Mobile Telephone Service;

(v) Very Small Aperture Terminal Service (VSAT);

(vi) Radio Paging Service;

(vii) Public Mobile Radio Trunk Service;

(viii) Global Mobile Personal Communication Service; and

(ix) Internet Service_ and having an aggregate turnover of Rupees twenty five crore or more, made from the sale or supply of all its products or activities during the preceding financial year.”

3. In regulation 4 under Section II of the Reporting System on Accounting Separation Regulation, 2004, for clause (2) the following shall be substituted, namely: “(2) (a) The service providers to whom this Regulation applies shall every year prepare Reports mentioned in Regulation 4 (1) on the basis of historical cost accounting.

(b) The service providers to whom this Regulation applies shall also prepare reports every second year on the basis of replacement cost accounting if they are providing any one or more of the following services, namely:-

(i) Basic Telephone Service;

(ii) National Long Distance Service;

(iii) International Long Distance Service; and

(iv) Cellular Mobile Telephone Service.

Provided that if less than three years have elapsed since issue of the license to a service provider to provide a particular service from amongst the services mentioned above, the financial reports based on replacement cost accounting may not be prepared for that service.”

4. In regulation 5 under Section II of the Reporting System on Accounting Separation Regulation, 2004, for clause (2), the following shall be substituted, namely: “(2) The service providers who are required to prepare reports on the basis of replacement cost accounting in accordance with the provisions of sub-clause (b) of clause (2) of regulation 4 shall also submit reports based on the replacement cost accounting every second year within six months of the end of the accounting year to the Authority.”

5. This Regulation contains an explanatory memorandum to provide clarity to matters covered under the Regulation. (Indu Liberhan) Principal Advisor (FA&IFA) F.No 16-31/2005-FA Explanatory Memorandum

1. The Reporting System on Accounting Separation Regulations, 2004 is applicable to all service providers providing any of the nine specified telecom services in the existing regulation (1). Every year these service providers are required to prepare accounting separation reports on the basis historical cost accounting and every second year on the basis of replacement cost accounting. Applicability of the Regulation

2. This year many service providers, mainly ISPs with a small subscriber base, PMRTS operators, Radio Paging Operators failed to file accounting separation reports with the Authority. The Authority had issued show cause notices to all service providers who failed to submit accounting separation reports in time and therefore comply with the requirements of the regulation. The service providers like PMRTS have written in their replies to the show cause notice that PMRTS operators have small turnovers and therefore Accounting Separation Regulation is a burden on the PMRTS industry. Moreover most PMRTS operators are standalone operators providing single products and therefore accounting separation of their accounts may not serve any useful purpose. On the other hand most Radio Paging Operators have surrendered license. Many small ISPs have also written about their inability to prepare accounting separation reports. The Authority has very carefully examined various responses to the show cause notices and is of the view that accounting separation may be causing undue burden on service providers having small turnovers and decided that the accounting separation shall be applicable to only those companies which had a turnover of a minimum of Rs 25 crores for the preceding financial year.

3. The Authority also recalled that the main objectives of the Accounting Separation Regulation was to examine and check anticompetitive practices like cross subsidy, predatory pricing etc. Telecom companies having low turnovers are generally not in a position to practice such anti competitive behaviour and therefore found it fit to exempt all telecom service providers having turnover of Rs 25 crores or below from preparing and filing accounting separation reports.

4. The other main objective of the Accounting separation reports was to provide audited cost figures for tariff setting. Since, most service providers with turnover of Rs 25 crores or below are providing service like PMRTS, Internet, Radio paging etc and for which tariffs are forborne, their accounting separation reports may not be required. Moreover low turnover generally represents under utilization of network or smaller nature of the operation itself. The cost figures for such companies may not be very useful for tariff setting

5. While deciding limits for exemption on applicability of the accounting separation regulation, Authority considered various options. The Authority also took note that the Cost Accounting Telecom Rules notified by the Ministry of Finance has a similar provisions on applicability of the Rules for only those companies having a minimum turnover of Rs 10 crores or less for the previous year. Fixation of a higher ceiling of around Rs 100 crores would have exempted many standalone operators having significant market shares in services like VSAT. A lower ceiling of around Rs 10 crores may have resulted in applicability of the regulation on operators providing standalone service like PMRTS or on standalone operators having insignificant market share when compared to its competitors. The Authority therefore found that a ceiling of Rs 25 crores turnover is appropriate for exempting service providers from the applicability of the Accounting Separation Regulation.

6. The Authority while considering applicability of the Accounting Separation Regulation also considered other option of exempting all standalone service providers, providing single service. The Authority noted that many standalone operators are dominant and have captured major market share in areas or markets in which they are operating. Such operators are in a position to take advantage of their market leadership and scuttle competition. The Authority has therefore decided against exempting all standalone telecom operators from accounting separation. Exemption from filing Accounting Separation reports on the basis of Replacement Cost Accounting.

7. As per the Accounting Separation Regulation, every second year, the replacement cost accounting separation reports are to be prepared and filed with the Authority. The financial year, 2004-05 was the second year of implementation of the Regulation and therefore many service providers were required to file the replacement cost accounting separation reports with the Authority. Many service providers especially ISPs, PMRTS operators expressed inabilities to prepare reports on the basis of the replacement costs and stated that preparation of such reports are burden on small operators. The Internet Service Provider Association also requested to exempt ISPs from preparation of the replacement cost accounting separation reports.

8. In the telecom sector technological changes and declining costs are common. The costing of services based on historical accounts at times give very different results from those based on the current costs. The costing of interconnection usage, Ports etc based on replacement/current costs by various telecom regulators is common. The Authority also had framed Accounting Separation Regulation keeping in mind the importance of the replacement cost in costing of telecom services. However, over these years competition in many areas have matured and the Authority has stopped regulating tariffs for most of the services. The Authority is presently regulating only IUC and few tariffs like IPLC and DLC. The Authority, therefore, considers that replacement cost accounts for many services may not be needed in the near future and therefore decided that except Access Providers, NLDOs and ILDOs, others may be exempted from the requirement of preparing replacement cost reports. However shall the need arise, the Authority may review the applicability of replacement cost accounting on other service providers. Notification The Reporting System on Accounting Separation Regulation, 2004 (4 of 2004) Section I Section II Section III Explanatory Memorandum Step 1 Product/Network Service Basic Telephone Service Copper loop POTS Bulk subscribers (including DID trunk) VPT equipment Switches Transmission media and equipment Intra-circle long distance network Transmission media and equipment National Long Distance Service LDCA to LDCA International Long Distance Service Transmission – International (This would include transmission equipment, satellite linkage, submarine cable etc.), region wise. Cellular Mobile Telephone Service Core network Dedicated network VSAT TDMA DAMA Profit and Loss Statement- Product REVENUE (Net of Service TAX) ( refer note 1) Total Less: Pass through Less: License fee Less: License fee penalty, if any Net revenue COST Total cost Profit and Loss Statement- Service (Rs. Lakhs) Particulars REVENUE (Net of service tax) REVENUE (refer note 1) Total Less : License fee penalty if any Net revenue COST Employee cost Training and recruitment Others Sub-total Administration cost Printing and stationery Audit fees Others Sub-total Sales and marketing cost Sub-total Government charges Leased rentals Others Sub-total Other cost Others Sub-total Finance charges Others Sub-total Total cost Profit/Loss before interest and tax Total capital employed (Rs Lakhs) DIRECT COST (I) Employee cost Training and recruitment Others Sub total Administration cost Printing and stationery Audit fees Others Sales and marketing cost Others Sub total Leased rentals Others Sub total Total direct cost (I) NET WORK COST / Network Replacement Cost ------- -------- ------- Total Network Cost (II) SUPPORT FUNCTION / DEPARTMENT COST or REPLACEMENT COST OF SUPPORT FUNCTIONS ------ Total support function / department cost (III) Grand total (I) + (II) +(III) Cost Sheet – Network Elements Rs Lakhs Direct cost NETWORK DIRECT COST Employee cost Training and recruitment Others Sub total Administration and other cost Printing and stationery Audit fees Others Sub total Others Sub total Government charges Leased rentals Others Total direct cost (I) Sub Total (II) Apportionment of Cost to Products Usage Network Cost ( Historical Cost Basis) O&M Network Elements Rate/ unit Tangible Assets ----- ---- ----- Total NETWORK ELEMENTS --- --- --- Sub Total (A) PRODUCTS --- --- ----- Subtotal ( B) SUPPORT FUNCTION/ DEPARTMENT Sub Total ( c) Total ( a+b+c) Reconciliation Statement – Profit and Loss Statement RECONCILIATION STATEMENT – PROFIT & LOSS ACCOUNT Service 1 Sub total Service 2 Service 3 Service 4 Total Adjustments Return on capital employed on network elements Non regulated business Elimination of inter business transactions Non relevant items Interest costs Extra- ordinary items – such as abnormal loss due to fire/ theft etc. Others Unallocated items Any other items (specify the details) Sub total Total as per audited accounts Service 1 Sub total Service 2 Service 3 Service 4 Total Adjustments For non regulated business Elimination of inter business assets / liabilities Non relevant items Investments Long term borrowings Others Unallocated items Any other items (specify the details) Sub total Total as per audited accounts Regulation- reporting-II(Final) feb 232004.pdf Details of tariff schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, call charges, Leased circuit charges, etc. Also, mention the duration of the above scheme. Please provide details of the discounting policies/promotional Scheme. Minutes of Usage under each of the tariff plan Details of DELs Total Capacity of DELs Number of subscribers Total number of working lines and capacity utilisation (in %) No. of DELs with STD facility No. of DELs with STD/ISD facility STD PCOs Local PCOs VPT Average revenue per subscriber Average Revenue Details (including call charges and rentals) Revenue in Rs. per month Total calls from Local and STD/ISD PCOs separately ( in terms of revenue and minutes of calls ) Average holding time per subscribe Break up of Revenue into Urban and Rural areas Network overview chart Number of exchanges Number of SDCA Exchanges Number of subscribers for each type of access Intra-SDCA level (for each type such as) consolidated at circle level Inter SDCA Intra-circle level (for each type such as) consolidated at circle level Details of POIs with other operators at Interconnection infrastructure/ Number of ports at SDCA for Interconnection with other Level II LDCAs for Interconnection with other Level I LDCAs for Interconnection with other SDCA Network as consolidated at circle level No. of new switches planned New access lines planned Transmission planned (Indicate total route kilometers for each capacity separately) New POIs planned New VPTs and PCOs planned Inter-SDCA Intra-circle long distance network as consolidated at circle level No. of new Switches planned Transmission planned (Indicate total route kilometers for each capacity separately) New POIs planned IV . Traffic Details SWITCHING TRANSMISSION USAGE MINUTES Details of tariff schemes Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation charges etc. Also, mention the duration of the above scheme. Please provide details of the details of the discounting policies, if any. No. of subscribers (if any for direct billing by NLDO). Network overview chart Number of exchanges Media (for each type such as) Details of POIs with other operators Interconnection infrastructure/ Number of ports for Interconnection with No. of new switches planned Transmission planned (Indicate total route kilometers for each capacity separately) New POIs planned. IV . Traffic Details SWITCHING TRANSMISSION USAGE MINUTES Details of tariff schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, call charges, Leased circuit charges, etc. Also, mention the duration of the above scheme. Please provide details of the discounting policies, if any. Network overview chart Number of exchanges Transmission international Transmission Domestic Details of POIs with other operators Interconnection infrastructure/ Number of ports for Interconnection with Network rollout plan for next one year No. of new switches planned Domestic transmission planned International transmission planned New POIs planned. IV . Traffic Details SWITCHING TRANSMISSION USAGE MINUTES Details of tariff schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, call charges, leased line charges, etc. Also, mention the duration of the above scheme. Please provide details of the discounting policies, if any. Minutes of Usage under each of the tariff plan Number of subscribers (Please mention opening, closing and average number of subscribers for the year) Pre Paid Post Paid Total Subscribers Roaming subscribers Please mention rural and urban SDCA’s separately in which one or more BTS are located Average retail revenue per subscriber Average Revenue Details (including Airtime charges and rentals for both Prepaid and Postpaid) Revenue in Rs per month Average revenue per user (for post paid and pre paid subscribers separately) Wholesale Interconnection total revenue for MSO (operator wise details) Network overview chart SWITCHES / TRANSMITTER STATIONS TRANSMISSION Connected with IV . Traffic Details SWITCHING USAGE MINUTES Billed Proforma P Non-Financial Statement for VSAT Service Details of tariff Schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, Leased circuit charges, etc. Also, mention the duration of the above scheme. Please provide details of the discounting policies, if any. No. of subscribers Number of closed user groups Coverage Urban Rural Network overview chart CAPACITY Space segment – capacity (MHZ) Location of earth stations Total number of VSAT installed and capacity WPC details Availability of network in Percentage (%) System Description Roll out plan/upgradation plan for next one year. Details Of Tariff Schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, etc. Also, mention the duration of the above scheme. Please provide details of the discounting policies, if any. Price for Pager Instrument used for Radio paging service Alphanumeric Pager Single Line Pager 2 Line Pager 4 Line Pager Numeric Pager Single Line Pager 2 Line Pager 4 Line Pager Standard Alternative Number of Subscribers Package Circle Alphanumeric Numeric City Alphanumeric Numeric Total Number of Subscribers Individual Closed Users Corporate Clients Network overview chart WPC details Equipment Wise Details including Type, Location, Date of Commissioning (DOC), Make, Model & Version, Technology Used (Digital / Analog ), Total Capacity, Capacity Utilized Roll out/ upgradation plan. Proforma R Details of tariff Schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs etc. Also, mention the duration of the above schemes. Please provide details of the discounting policies, if any. Please provide details of price of PMRTS Instruments / Equipments No. of closed user groups. Network overview chart WPC details Equipment wise details including Type, Location, Date of Commissioning (DOC), Make, Model & Version, Technology Used (Digital / Analog ), Total Capacity , Capacity Utilized Upgradation details Interconnection if any Details of tariff Schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs etc. Also, mention the duration of the above schemes. Please provide details of the discounting policies, if any. Please provide details of price of GMPCS Instruments / Equipments No. of subscribers. Network overview chart WPC details Equipment wise details including Type, Location, Date of Commissioning (DOC), Make, Model & Version, Technology Used (Digital / Analog ), Total Capacity , Capacity Utilized Interconnection if any Rollout plan / upgradation plans. Details of tariff schemes applicable during the year Please provide a copy of the tariff schemes detailing tariff elements including new connection charges, deposits, rentals, advance rentals, installation costs, call charges, Leased Circuit charges, etc. Please Also, mention the duration of the above scheme. provide details of the discounting policies, if any. Service wise number of subscribers PSTN Dial Up ISDN Dial Up DSL Cable Wireless Leased Circuit Copper Leased Circuit Fiber Cyber Cafes Others Income through Cyber Cafes: Network overview chart Number of ISP nodes as on date Details of international gateways (Please specify type of gateway, whether Owned /Leased, No. of landing stations /satellite gateways and Allocated frequency band for Satellite gateways) Bandwidth details Total bandwidth (domestic and International combined ) allocation (type of service) Nodewise allocation of total bandwidth Network expansion plans Details of POIs with other ISP operators. Whether connected to NIXI 2nd amendment.pdf No.: 414-7/99 – FA Annexure A EXPLANATORY MEMORANDUM 3rd amendment.pdf

1. Short title extent and commencement: - Deletion of Regulation 7 Explanatory Memorandum Secretary cum Principal Advisor Annexure Explanatory Memorandum

The Reporting System on Accounting Separation Regulation, 2004 (4 of 2004)

The enactment

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