Top Court rejects telecom firms' plea on adjusted gross revenue

The Supreme Court on Thursday dismissed a petition filed by telecom companies to refigure adjusted gross revenues (AGR) amid a long-standing dispute over payment of dues to the government.

Vodafone India, Bharti Airtel, and other telecom firms have filed a curative petition challenging the court's October 2019 verdict, which mandated that they pay the government Rs 92,000 crore within three months. The current petitions are against a September 2020 order requiring payment of AGR dues over a 10-year period; 10 percent of the total by March 31 every year.

In their petition, the telecom firms argued that the Department of Telecommunications (DoT) made a significant error in calculating these dues, which include license fees and spectrum charges.

Reports indicate the DoT-calculated AGR dues total over ₹ 1 lakh crore; Airtel is believed to owe ₹ 43,980 crore and Vodafone ₹ 58,254 crore. But as per the companies' own calculations, Airtel said it owed only ₹ 13,004 crore and Vodafone claimed dues of only ₹ 21,533 crore.

Similar recalculations were made against dues owed by other companies, including Tata Teleservices. The telecom firms also complained about the court's "arbitrary penalty".

The computation of AGR is the basis for revenue-sharing between telecom firms and the government, which receives money for allotting licenses and spectrum usage.

The DoT calculates the government's share as a percentage of the AGR. This amounts to three to five percent in spectrum usage fees and eight percent as licensing fees.

But how exactly the AGR is calculated has been a contentious point for nearly two decades now, with telecom firms insisting it must only include core revenue. The government, however, includes all revenue, including those from non-telecom channels, in its calculation.