Oct 24th, Indian Supreme court made their judgment on a long standing Adjusted Gross Revenue (AGR) case between telecom companies, specially Airtel and Vodafone-Idea and Department of Telecommunications (DoT). The Supreme court judgment comes in favor of DoT. Now Indian telecom sector which is already facing financial crisis has to pay INR 92,000 Crores within 3 months of time.
Supreme court orders- all the revenues excluding termination fees and roaming charges will be part of AGR while telcos had argued that non-telecom and non-core revenues shouldn’t be included in AGR. Supreme court order has exposed the incumbent telcos to potential demands by DOT of up to Rs 1.33 lakh crore.
Unpaid license fees of INR 92000 crores have to be cleared with 3 months of time. Now Airtel and Vodafone Idea have to shell out about 54 percent of total dues INR 21,682 crore for Airtel and INR 28,308 crore for Vodafone-Idea. Rest 46 percent goes to Reliance communications, Tata, Aircel and others but these operators do not exist anymore. So only Airtel and Vodafone-Idea have to be worry and need to work out a quick plan to come out this debt burden.
The top executives of Bharti Airtel and Vodafone-Idea are planning to meet top government officials starting today on strategies that were prepared by the two companies over the weekend regarding the recent Supreme Court order on the definition of Adjusted Gross Revenue (AGR), The Economic Times reported, citing people with knowledge of the matter.
What is AGR case?
AGR (adjusted gross revenues ) says telecom operators share their revenues with the DoT (department of telecommunications ) as a licence fees and spectrum usage charges (SUC). The case was fought for more than 16 years and finaly DoT won the case.
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