The Indian telecom operators might have to pay lesser adjusted gross revenue (AGR) dues going forward. One of the biggest pain points of the telecom industry of India is the high amount of levies on any and everything they want to do. The telecom industry is currently working on a micro-definition of adjusted gross revenue (AGR) to solve higher levy issues, reports Livemint.
S.P. Kochhar, Director General, Cellular Operators Association of India (COAI), said the work on a micro-definition of AGR is going on.
This time, the idea is to reduce as many disputes as possible. There will be a list of negatives and positives that is being prepared which will specify that components such as rental income, payments bank, and e-commerce platforms will be excluded from AGR, said Kochhar.
Reduced AGR Dues Would be Another Boost to the Industry
There’s no denying that the Indian government has helped the desperate telecom sector in a major way with the relief measures announced last year. A further change in the definition of AGR, where more items will be reduced, will help the telecom operators in saving more money.
This, in turn, would allow cash-strapped operators to get more relief and increase capex to fight head-on with the competition.
The telecom operators, including Bharti Airtel and Vodafone Idea (Vi), already have a ton of AGR dues on their shoulders. While the moratorium has reduced the stress significantly, it will come up due in a matter of a few years. Thus, redefining AGR to help the sector further is a move in the right direction.
With improved profitability of the business due to less AGR dues, the telcos will be able to attract more outside investors, and their business valuation would improve significantly.
Differences over the definition of AGR has been a long point of the battle for the sector and the government.