The Department of Telecommunications (DoT) has removed several non-telecom income items, such as those from property rents, dividends and interests, from the calculation of adjusted gross revenue (AGR).
The amendment comes into effect from October 1, 2021. This will be applicable to the dues arising from operations of license after the effective date. The amendment aligns with the government’s attempt to revamp the sector and reduce the burden on the industry. Licence fees and spectrum usage charges (SUC) are paid on the basis of AGR. Hence, a lower AGR will mean reduced related levies.
As part of this move, the DoT has introduced a new concept of applicable gross revenue (ApGR), which is arrived at by removing all the non-telecom revenues earned by telcos from their gross revenue. As per industry analysts, non-core items currently make up around 10 per cent of a telco’s total revenue.
Gains from forex fluctuations, insurance claims, capital gains on account of sale of fixed assets and securities, receipts from Universal Service Obligation Funds, bad debts recovered, excess provisions written back, revenue from activities under the I&B licence and revenue from operations other than telecom activities will now be excluded from gross revenue to arrive at ApGR. The AGR would then be arrived at from ApGR, after further removal of some more non-telecom services related items like the roaming revenue passed onto other eligible/entitled telecommunication services providers.