What is AGR?
- Telecom operators are required to pay licence fee and spectrum charges in the form of ‘revenue share’ to the Centre. The revenue amount used to calculate this revenue share is termed as the adjusted gross revenues (AGR).
What is the issue?
- According to the Department of Telecommunications’ (DoT), the calculations should incorporate all revenues earned by a telecom company – including from non-telecom sources such as deposit interests and sale of assets.
- The companies, however, have been of the view that AGR should comprise the revenues generated from telecom services only and non-telecom revenues should be kept out of it.
- The tussle between DoT and the telecom companies has been ongoing since 2005.
- In 2019, the Supreme Court upheld the DoT’s definition of AGR.
Why in News?
- The Union Cabinet has announced several steps to offer relief to telecom companies burdened by large regulatory dues and attract foreign capital into the telecom sector.
- Among the most pertinent was the rationalisation of the definition of adjusted gross revenues (AGR), with the government saying that non-telecom revenues will not be included in the calculation of AGR, bringing much relief to incumbent telecom players such as Bharti Airtel and Vodafone-Idea.
- Telecom companies will also get a four-year moratorium to repay dues to the government.
- Also, 100 per cent foreign direct investment in telecom via the automatic route has been approved, and the regime of heavy interest, penalty and interest on penalty on payment of licence fees, spectrum charges and all kinds of other charges have been rationalised.
- In addition to these, spectrum auctions will be done for 30 years instead of 20.