The Supreme Court has passed an order, wherein in effect, the Department of Telecommunications (DoT) is to collect a licence fee from operators on revenues earned from non-telecom related activities.
The court said that DoT?s decision on charging a licence fee on the gross revenue earned by the companies was absolute.
?We, therefore, hold that the Telecom Regulatory Authority of India (TRAI) and the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) have no jurisdiction to decide on the validity of the definition of the term adjusted gross revenue (AGR) in the licence agreement and to exclude certain items of revenue which were included in the definition of AGR in the licence agreement between the licensor and the licensee,? the Supreme Court said.
Currently, operators pay between 6 and 10 per cent of their annual revenues as licence fee to DoT.
According to DoT?s regulation, revenues earned by operators from activities such as handset sales, interest earned from bank deposits, sale of assets and other corporate receipts are also included in the amount on which the revenue share is calculated.
Prior to this, in July 2006, TDSAT had passed an order that revenue obtained by operators from activities beyond the licence will be excluded from AGR. This meant that income earned by the operators from non-telecom-related activities would not be included for calculating licence fees payable to DoT.
Dismissing TDSAT?s order, the Supreme Court said, ?The definition of AGR in the licence agreement is without jurisdiction and is a nullity.?
