SC lets telecom firms stagger AGR payments over 10 years

2 min read

News: The Supreme Court has said that telecom operators could pay their adjusted gross revenue(AGR) dues to the Department of Telecommunications (DoT) over the next 10 years starting April 1,2021.

Facts:

  • What is AGR? Adjusted Gross Revenue(AGR) is the annual license fee (LF) and spectrum usage charges (SUC) that telecom operators are charged by the Department of Telecommunications(DoT).
  • How is it calculated and what’s the contention? As per DoT, the charges are calculated based on all revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales.On the other hand, telecoms insist that AGR should comprise only the revenues generated from telecom services.
  • What’s the issue now? 
    • In 2005, Cellular Operators Association of India (COAI) challenged the government’s definition for AGR calculation.
    • In 2015, the TDSAT (Telecom Disputes Settlement and Appellate Tribunal) stayed the case in favour of telecom companies and held that AGR includes all receipts except capital receipts and revenue from non-core sources such as rent, profit on the sale of fixed assets, dividend, interest and miscellaneous income.
    • However, setting aside TDSAT’s order, the Supreme Court in 2019 upheld the definition of AGR as stipulated by the DoT.