Incumbent telcos ordered to pay pending dues to DoT under AGR 

The Supreme Court has ordered that the Central Government was right in its definition of Adjusted Gross Revenue (AGR). This means that telcos would now have to cough up a total of Rs 92000 crores as penalty to the Department of Telecommunications (DoT). The penalty encompasses spectrum usage charges (SUC) and license fees. The Apex court has also ruled that except a couple of components of revenue, most fall under AGR. 

AGR concerns

Now, a Supreme Court bench headed by Justice MR Shah, Arun Mishra, and Abdul Nazeer has stated that the AGR concerns raised by telcos are frivolous and has stated that the telcos are liable to pay interests accured over delayed payments as well. Also, revenue models generated via roaming and call termination would also constitute as AGR, informed the Supreme Court bench. In reaction to the Supreme Court verdict, an Airtel spokesperson stated that the telco has been disappointed by the verdict.  “We are disappointed by the verdict of the Hon’ble Supreme Court. The definition of AGR has been a long-standing dispute between the DoT and the Telecom Service Providers (TSPs) dating to 2005. The issue of inclusion of revenue from non-telecom activities and interpretation of the heads included in the definition of AGR under the license conditions has been through several rounds of litigation, which have been in favour of the TSPs till now,” added the Airtel spokesperson. 

At this point in time, it is worth remembering that AGR constitutes all sort of revenue generated by the telcos. This also includes non-telecom revenue as well. Telcos, on their part, want only revenues raised through telecom to be included under AGR. “Of the 15 old operators impacted by the order, only two private sector operators remain in service today. The Government must review the impact of this decision and find suitable ways to mitigate the financial burden on the already stressed industry,” informed the spokesperson at Airtel, without commenting in detail, for now.  

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