AGR Case: SC dismisses plea for recomputation of dues

Source:   Live Mint

What is the news?

SC dismisses plea by Bharti Airtel, Vodafone Idea seeking direction for correction of errors in Adjusted Gross Revenue (AGR) calculation.

What is the issue?

• In 2005, the Cellular Operators Association of India (COAI) challenged the government’s definition for AGR calculation. The Supreme Court in 2019 upheld the definition of AGR as stipulated by the DoT.
• Further, The Supreme Court insisted 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.
• Consequently, Bharti Airtel Ltd and Vodafone Idea Ltd had moved the apex court seeking directions to the DoT to recalculate AGR dues, citing “mathematical errors” in the calculation of the outstanding amount by the department.
• However, recently, the Supreme Court (SC) dismissed the applications of the two telecom companies.

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.