Airtel, Jio, Vi Might be Elated as DoT Revises AGR Definition

The DoT has amended the AGR definition and multiple non-telecom revenue items have been excluded for calculating the AGR amount.

Highlights

  • The DoT has introduced the applicable gross revenue (ApGR).
  • This is what Bharti Airtel and Vodafone Idea were fighting with the government about.
  • The government charges licensee fees (LF) and spectrum usage charges (SUC) on the basis of AGR.

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Airtel, Jio, Vi

As a part of the relief measures announced a few weeks back, the Department of Telecommunications (DoT) had said that the definition of adjusted gross revenue (AGR) will be changed. Now, in a fresh development noted by ET Telecom, the DoT has amended the AGR definition and multiple non-telecom revenue items have been excluded for calculating the AGR amount. Non-telecom items such as dividends, property rent, and interest from the calculation of AGR dues have been excluded from the total calculation. The new definition of the AGR is applicable since October 1, 2021.

The DoT has introduced the applicable gross revenue (ApGR). It is nothing but the AGR calculated after the removal of non-telecom revenue earned by the operators from their gross revenue.

Private Operators Will be Very Happy

This is what Bharti Airtel and Vodafone Idea were fighting with the government about in the Supreme Court last year (2020). The private telcos wanted the AGR to exclude all the non-telecom revenues. Since the definition has now changed, the private operators will be very happy.

For the unaware, the government charges licensee fees (LF) and spectrum usage charges (SUC) on the basis of AGR. Thus, a lower AGR amount would mean the telcos will have to pay less SUC and LF. A thing worth noting here is that the government has already abolished the payment of SUC on the purchase of spectrum from future auctions.

In 2020, the Supreme Court had said that it would go with the definition suggested by the DoT and had ruled that the AGR dues will include the non-telecom revenues as well. But things have changed now and the new definition is already applicable from October 1, 2021. This will make the operators very happy as their cash flow position would be enhanced even further because of fewer statutory dues in the future.

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Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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