Supreme Court Rejects Telecom Companies' Plea On AGR Recalculation

India’s Supreme Court has denied telecom companies’ request to recalculate their adjusted gross revenue (AGR) dues on Thursday which has been a point of contention between the companies and the government for years. The telecom companies including Vodafone Idea, Bharti Airtel, and other telecom operators claimed that the Department of Telecommunications (DoT) made a significant error in calculating license fees and spectrum charges that led to hefty penalties.

The telecom companies were ordered to pay Rs 92,000 crore to the government within three months in 2019 but the companies sought relief on the penalties due to the claiming error in calculations and been a way for disputes that centres around how AGR is calculated. Telecom firms stated that it should only include core revenue whereas the government includes all revenue. Later, the Supreme Court ruled in favour of the government ordering telecom firms to pay Rs 92,000 crore within 180 days and this led to record losses for Vodafone India and Bharti Airtel.

Telecom operators owe over RS 1.65 lakh crore in AGR dues up to FY 2018-19. The DoT calculates the government’s share as a percentage of the AGR ranging from 3-5% for spectrum usage fees and 8% for licensing fees. Bharti Airtel and Vodafone Idea have opted to defer payment of additional AGR dues with Airtel deferring Rs 3,000 crore and Vodafone Idea deferring Rs 8,837 crore by four years.

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Earlier this month, DoT introduced key reforms aimed at simplifying the approval processes for telecom licenses and wireless equipment. This move, according to a statement from the Ministry of Communications, is part of the ongoing effort to improve the ease of doing business within the telecom sector.

Under the new regulations, fixed timelines have been introduced for issuing Experimental and Demonstration Licenses. For licenses that do not require inter-ministerial consultation, approval will be granted within 30 days for Experimental Licenses and 15 days for Demonstration Licenses. In cases requiring consultation, the timelines extend to 60 and 45 days, respectively. Provisional licenses will be issued in the interim if no objections are raised.

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