Telecom operators to pay Rs.92000cr.

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What is adjusted gross revenue (AGR)?


Sc dismisses telecom’s definition of AGR, up holds all dues payable to government

Government v/s telecom operators

  • The tussle started when telecom operators migrated to a new system offered by government in 1999.
  • This new system comes to be known as revenue sharing model.
  • Under this, they agreed to share a certain percentage of revenue with the government as a license fee.

Adjusted gross revenue (AGR)

-The revenue from which telecom operators agreed to share with government is AGR.

-Initially, 15% AGR was fixed as license fee under revenue sharing model.

-This was reduced to 13% and then to 8% in 2013.

What is main problem?

-The government and telecom operators differed on the definition of AGR.

The telecom operators contended that AGR should include only “Core telecom services.

-But the centre’s contention was that AGR should also include dividends, handset sales, rent and profit from scrap sole.

The dispute goes back to2013  [Telecom disputes Settlement and appellate tribunal] TDSAT.

In the supreme court

#TDSAT had in2015 excluded some non care revenue from AGR.

#In an Interim order TOSAT had stayed the demands made by DOT.

#Government agreed that it has wide discretion in laying down terms and condition while giving a resource (spectrum) for exploitation by private party.

# DOT challenged TDSAT decision in the SC

#Said telecoms have willingly entered into agreement that contained wide definition of AGR.

#TDSAT went into the details of computing AGR beyond its jurisdiction TDSAT ruling is erroneous and should be set aside.

Bringing the curtain down on the battle between the centre and telecom companies going on the 2003, a bench of justices Arun Mishra, S. Abdul nazeer and MR shah rejected almost all contentions of the companies and gave the verdict in favor of the centre.” The definition of gross revenues is crystal clear in the agreement. How the adjusted gross revenue is to be arrived at is also evident it cannot be submitted that the revenue has not been defined in the contract. Once the gross revenue is defined, one cannot depart from  it,” the bench said.

Total impact could be Rs.1.4 lakh crore

Original dues               Dues, including interest, penalty

And interest on penalty.


License fee                                 23,189 cr

92,642 cr

Spectrum user charge                        11,594cr

46,321 cr

138,962 cr


34, 783 cr



All figures are estimates and may be revised further

Airtel and Vodafone- idea account 54% of the total license fee dues claimed by DOT.

License fee

Airtel         –   21,682

Voda-Idea  – 28,308

Tata-tele – 99,87

Rcom       –   16,456

Aircel    –           7,852m

Reliance Jio        –  13

Telenor India     -1950

Others        –   6393

Total      -92,641

BSNL – 2098, 72 cr.

MTNL  – Rs. 2,537, 48cr.

Will telecom operators be able to pay this?

Most telecos are reeling under heavly debt burden

Voda-Idea     –      Rs. 1.2 lakh  cr

Bharti-Airtel   –   Rs. 1.16 lakh cr

Reliance –Jio  – Rs. 76,000 cr                    estimated debt.

Reliance com.   –   Rs. 47,606 cr

BSNL – MTNL – Rs. 40,000 cr

Now what is going on ?

  1. In 2005, the cellular operators association of India [COAI] challenged the government definition for calculation.
  2. Later in 2005, the TDSAT said AGR included all receipts expect capital receipt and revence from noncore sources such as rent, profit on the sale of fixed asset, dividend, interest and miscellaneous income etc.
  3. The regulator has also included forex adjustment under AGR apart from ruling that license fee will not be charged twice on the same income. It however, exempted bad debt, fo-rex fluctuations, and sale of scrap to be calculated for AGR.
  4. The government has also raised the issue of “under reporting of revenues of duck charges”.
  5. The DOT, however, filed an appeal before the SC, citing that the TDSA had no jurisdiction on the validity of terms and condition of licenses.