Reliance Jio All Set to Dominate Upcoming Spectrum Auctions as AGR Troubles Increase for Rival Telcos

The news about the telecom industry is reaching the far ends of India because of the grim conditions of the sector. The telecom industry has been neck-deep in financial strain ever since billionaire Mukesh Ambani led telecom operator, Reliance Jio made its way into the industry and sprawled a two-year-long data tariff war which bruised the telecom operators badly, led to many consolidations and left the industry in debt. With all of this happening, Reliance Jio definitely found the way to march ahead to become the biggest telecom operator in the country with the most number of subscribers. However, the other competing telcos have not been that lucky. By other telecom operators we mean, Vodafone Idea and Bharti Airtel. If anything, the situation has worsened for these two telecom operators because of a new verdict ruled by the apex court of the country. Supreme Court, in its new matter, has changed the definition of the Adjusted Gross Revenue (AGR), which could be a fate deciding verdict for these telecom operators.

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What Exactly is The AGR Issue

Now to understand the matter at depth, firstly, it is important to understand what the AGR issue is all about at its core. So, the adjusted gross revenue is something that is reported by the telecom companies to the Department of Telecommunications (DoT). Now just like other industry parameters like the ARPU (Average Revenue Per User), the AGR is also an important metric for the telecom operators, and it points towards their profitability. But, AGR is also important because it is the metric based on which the DoT calculated the license fees and Spectrum Usage Charges (SUC) which are to be paid by these telecom companies. So, you can imagine that the higher the AGR, the higher SUC and license fee the telcos would have to pay.