Definition of Adjusted Gross Revenue, Telecom Industry Under Threat

Definition of Adjusted Gross Revenue, Telecom Industry Under Threat

Internet service providers have requested the Government to review the definition of Adjusted Gross Revenue (AGR) for the survival of the telecom industry as the Supreme Court dismissed a plea by telcos seeking review of its verdict on recovery of Rs 1.47 lakh crore.

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It is going to be a disaster for the telecom industry. Dismissal of review petition will lead to duopoly situation which is not good for consumers.

Small Internet Service Providers (ISPs) will not be able to survive unless government steps in to review AGR definition, Internet Service Providers Association of India President Rajesh Chharia said.

The Supreme Court dismissed the plea of telecom majors, including Bharti Airtel and Vodafone Idea, seeking review of certain directions of the apex court on recovery of past dues amounting to Rs 1.47 lakh crore from telecom service providers.

The recovery of past dues by the Government was based on Adjusted Gross Revenue (AGR) of about Rs 92,000 crore.

The apex court on 24 October 2019, last year upheld the AGR definition formulated by the DoT and termed as intangible the nature of objections raised by telecom service providers.

Vodafonde Idea Chairman Kumar Mangalam Birla has already announced that the company will shut its business in India if it does not get any relief in the AGR case.

Based on The Supreme Court judgement and submission made by the Department of Telecom, total liability on Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in licence fee.

In the case of Bharti Airtel, the liabilities added up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC dues.

Bharti Airtel too had expressed concern on continuity of business in light of AGR issue.

Airtel has raised USD 3 billion for investment in infrastructure. Now most of it will go in paying up dues and services to consumers will suffer. Not only telecom companies, banks will also suffer as they have massive exposure to telecom firms. This will also lead to job losses. Government has to take some serious measures to resolve this crisis, Chharia said.

Bharti Airtel, Vodafone Idea and other telecom companies owe the government as much as Rs 1.47 lakh crore in past statutory dues, according to data shared by the telecom minister  ShriRavi Shankar Prasad in Parliament

Prasad ji said telecom companies owe the government Rs 92,642 crore in unpaid licence fee, and another Rs 55,054 crore in outstanding spectrum usage charges. In the case of Bharti Airtel, the liabilities added up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC dues (not including the dues of Telenor and Tata Teleservices).

In the case of Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in licence fee.

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