Adjusted gross revenue (AGR)

The Supreme Court has allowed telecom companies 10 years’ time to pay their adjusted gross revenue (AGR) dues to the government.
Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
It is divided into spectrum usage charges and licensing fees, pegged between 3-5 per cent and 8 per cent respectively.
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.
The telecom sector was liberalised under the National Telecom Policy, 1994 after which licenses were issued to companies in return for a fixed license fee.
However, to provide relief from the steep fixed license fee, the government in 1999 gave an option to the licensees to migrate to the revenue sharing fee model.
The DoT argued that AGR includes all revenues (before discounts) from both telecom and non-telecom services.
The companies claimed that AGR should comprise just the revenue accrued from core services and not dividend, interest income or profit on sale of any investment or fixed assets.