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
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
Spectrum user charge 11,594cr
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.
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
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 ?