In terms of most businesses, telecommunications includes a variety of services including local, long distance and cellular services, internet and data services, paging, phone maintenance expenses, and more. With so many bases to cover there are ever more opportunities for billing errors, and the sheer scope entailed in keeping track of minute details can result in missed items and severe overcharges.
The Telecom Regulatory Authority of India Act, 1997 mandates Telecom Regulatory Authority of India (‘TRAI’ for short) to lay down the standard for quality of service to be provided by service providers and to ensure quality of service so as to protect the interest of the consumers. Accordingly TRAI had issued the ‘Quality of Service (Code of Practice for Metering and Billing Accuracy) Regulation, 2006 which was amended on 25.03.2013, in order to-
- bring uniformity and transparency in the procedures being followed by service providers with regard to metering and billing;
- specify standards relating to accuracy of measurement, reliability and billing;
- measure the accuracy of billing provided by service provider from time to time and to compare them with the norms so as to assess the level of performance;
- minimize the incidence of billing complaints; and
- to protect the interest of consumers of telecommunication services.
These regulations have laid down a code of practice for metering and billing accuracy, which every service provider has to comply with.
Billing System
A billing system consists of a series of independent applications that, when run together, are referred to as the billing system. The components of the billing system are as under-
- Call Data Record (CDR) – This is used to record the call details, which include the start time of the call, the end time of the call, duration of call, originating number and terminating number;
- Guiding – This matches calls to customer calling plans/direction table. The application uses the start and end number and the duration and time of call to decide what the charge should be, based on the calling plans on the customer’s record;
- Rating application – This program applies the rate for the individual guided calls. Rating gives the call, a value to be charged at the time of billing (not including any promotions, discounts or taxes);
- Billing – this is usually performed once a month. In this all the rated calls that have been stored over the past 30 days are collected. The program adds any promotions and discounts that are associated with the consumer account. For example, if customers have called over a certain number of minutes, they might get a volume discount. In addition, taxes and credit are applied;
- Invoicing – when the billing job is complete, a file is created that includes entire customer information. This file is sent to a print house to be converted to paper invoices.
Rule 6 of Quality of Service (Code of Practice for metering and Billing Accuracy) Regulations, 2006 (‘Regulations’ for short) provides that the Telecom Regulatory Authority of India (‘Authority’) may, from time to time, notify the panel of auditors. The auditors shall meet the eligibility conditions specified by the Authority. The Auditor is to audit the metering and billing system of the service provider. The audit of the metering and billing system of service providers has been under implementation since the year 2006-07. TRAI, in May 2011 notified a panel of 16 auditors for auditing the metering and billing system of service providers. The validity of the said panel is to expire on 18.05.2014. TRAI is in process to appoint a fresh panel of auditors after 18.05.2014.
Audit Agency
The Audit Agency shall-
- Have accredition from the Quality Council of India/National Accredition Board for Certification Bodies; or
- From the International Accredition Forum; or
- An Audit firm registered with the Institute of Chartered Accountants of India/Institute of Costs and Works Accountants of India having experience in technical audit of similar nature to carry out the metering and billing of telecom service providers in accordance with the above regulations;
The Audit Agency shall have proven experience in the field of metering and billing system of telecom service providers. Similar proven experience in audit of online billing, payment and prepaid charging system involving use of software tools may also be considered. The Audit Agency shall have adequate qualified software/telecom/IT technical professions to carry out the proposed work.
The Audit Agency shall not undertake audit of metering and billing system of any service provider for whom he is also the statutory auditor or internal auditor or concurrent auditor or where he is the consultant to the service provider. The Audit Agency shall not undertake audit of any service provider consecutively for more than two years.
TRAI may call the empanelled auditor for the meetings/presentation for seeking or providing clarification or for reviewing the progress of audit. The Audit Agency shall attend such meetings or presentation at their own expenses.
Appointment of Auditor by service provider
Regulation 6(2) provides that every service provider shall, by the 30th April of every year, appoint an auditor from the panel of auditors notified by the Authority to audit at its cost, its metering and billing system of basic telephone and cellular mobile telephone service on annual basis. If the service provider is not able to appoint the auditor within the stipulated time a request may be made to the Authority seeking extension of time and Auditor shall be appointed within the extended time given by the Authority. The service provider may appoint an auditor-
- Consecutively for more than two years;
- Who is its internal auditor; and
- With whom it has business relationship during the last one year.
Guidelines by the Authority
Regulation 6(3) provides that The Authority may, from time to time, issue such guidelines and checklist, as it may deem fit for audit of the metering and billing system of the service provider and every service provider shall arrange audit of their metering and billing system in accordance with such guidelines and checklist.
Auditing of Call Data Records
Regulation 6(A) provides the procedure for auditing of call data records which is detailed as follows:
- The call data records of one month generated under different tariff plans shall be audited in each quarter in a manner so as to include-
- Three prepaid plans that have the maximum number of customers at the beginning of the quarter;
- Two new prepaid tariff plans launched during the quarter;
- Two special tariff vouchers having maximum number of customs at the beginning of the quarter;
- Two prepaid data plans having maximum number of customs at the beginning of the quarter;
- Two postpaid plans having maximum number of customers at the beginning of the quarter;
- Two new postpaid data plans having maximum number of customers at the beginning of the quarter.
The tariff plans shall not include corporate tariff plans, tariff plans shall not include corporate tariff plans, not offered to all consumers. In case the new tariff plans launched during the quarter is less than the number of having maximum number of customers shall be audited.
- Every service provider shall provide to the auditor the call data records and other documents as required by the auditor for conduct of audit within 30 days of receipt of request;
- If the auditor notices the instance of overcharging the same shall be reported to the service provider;
- The service provider within 15 days of receipt of such report, conduct an analysis to verify whether the observation of the auditor is correct;
- In case the observation of the auditor is found to be correct, the amount overcharged from the customers shall be refunded to such customers within 2 months of the receipt of the report;
- The intimation to this effect shall be sent to the auditor;
- In case the observation of the auditor is found to be incorrect, the reasons for the same shall be communicated to the auditor;
- Every service provider shall analyze the audit observations and provide to the auditor for recording in the audit report, detailed comments including-
- reasons for occurrence of the problem;
- date of occurrence of the problem; and
- date of rectification of the problem.
- Every service provider shall submit to the Authority every year an audit report certified by the auditor separately for basic telephone service and cellular mobile telephone service, for each service area in such format as the Authority may specify from time to time by an order by 31st July of every year;
- Every service provider shall submit to the Authority by 15th November of every year, an action taken report on each audit observation containing therein the details of the action on such observations, in such format, as may be specified by the Authority, from time to time by an order and such details shall include-
- Reasons for occurrence of the problem;
- Date of occurrence of the problem;
- Date of rectification of the problem;
- Action taken to address the problem;
- Number of customers affected for overcharging as observed by the auditor and the amount involved;
- Number of customers whom refunds were made within the time limit specified and total amount so refunded;
- Number of customers to whom refunds were made beyond the time limit and the total amount so refunded; and
- Number of customers to whom refunds could not be made and total amount that could not be refunded.
Obligations of Auditor
Regulation 6B imposes certain obligations on Auditor that are as follows:
- To undertake audit of the metering and billing system of a service provider in accordance with the guidelines and checklist issued by the Authority;
- The auditor shall not undertake audit of a service provider consecutively for more than two years;
- To comply with the provisions of the regulations, directions, orders and instructions issued by the Authority from time to time;
- Every Auditor shall-
- Ensure that the audit is conducted in fair and transparent manner;
- Ensure that the confidential data collected during the conduct of audit of a service provider is not shared with any person except in the manner provider under these regulations;
- Submit the Authority report on progress of audit in such format and at such intervals as the Authority may specify from time to time;
- Report immediately to the service provider instances of overcharging noted by it during the conduct of audit;
- Examine on receipt from the service provider the reasons for non acceptance of the audit observation on overcharging in excess of the applicable tariff, whether such reasons are acceptable or not and in case the auditor does not accept reasons furnished by the service provider he shall report such cases in the audit report along with his observations thereon;
- Submit to the Authority, a monthly progress report on action taken by the service provider on instances of overcharging reported in such format as may be specified by the Authority;
- Verify the action taken by the service provider on instances of overcharging reported and shall include the findings thereof in the audit report;
- Be responsible for completing the audit within the time limit to enable the service provider to submit the audit report to the Authority within the time limit;
- Check while auditing the metering and billing system of a service provider, compliances of the service provider to the Code of Practice for Metering and Billing Accuracy laid down in the regulation and, based on his assessment, he shall prepare an audit report containing-
- Separate audit report for each licensed service area audited by him;
- The methodology adopted for carrying out the audit;
- Details of tariff plans audited;
- Deficiency noted with respect to each of the code or quality parameter laid down in the Code for Practice for Metering and Billing accuracy and his comments on compliance reported by the service provider;
- Certificate that he has received all information and explanation from the service provider necessary for the conduct of audit;
- Comments on the authenticity of the information received from the service provider for the purpose of the audit;
- Details of test calls, sample analysis made and the results thereof, separately for each audit observations;
- Analysis of the complaints lodged in the records of the service provider to identify whether the service provider had undertaken root cause analysis of such complaints; and
- Verification of action taken on the audit observations in the preceding year; and
- Include in the audit report all the comments received from the service provider against each audit observation;
Format for reports
The following forms are prescribed to be submitted by the Audit Agency and the service provider:
- TRA/M&B-Audit/1 – Audit Report
- TRA/M&B-Audit/2 - Action Taken Report;
- TRA/M&B-Audit/3 - Progress Report on the audit of the metering and billing system of the service provider for the particular quarter ending;
- TRAI/M&B-Audit/4 - Progress Report on action taken by service providers on instances of overcharging reported during audit of the metering and billing system for the particular month;
Role of Authority
The Authority may refer complaints relating to billing, value added services and other complaints for verification or investigation by the auditor and every auditor shall verify such complaints and furnish report to the Authority within the time prescribed;
Failure of Auditor to comply with the provisions
If an auditor fails to comply with the provisions of these regulations, he shall be liable to be removed from the panel of auditors. Such removal shall be done after giving reasonable opportunity to the Auditor to explain the non compliance observed by the Authority.
Failure of service provider to comply with the provisions
If a service provider contravenes the provisions of the Regulations, without prejudice to the terms and conditions of its licence, or the provisions of the Act or rules or regulations or orders made, or directions issued there under, be liable to Rs.1 lakh per report for every week or part thereof during which the default continues, as the Authority may, by order, direct after giving reasonable opportunity.
If a service provider fails to provide details of the action on the audit observations or it has submitted details of action taken which it knows or believes to be false or does not believe to be true, it shall be liable to pay an amount, by way of financial disincentive, not exceeding Rs.10 lakhs per action taken report as the Authority may direct after giving a reasonable opportunity.
