When it comes to AGR Dues, there is nothing to talk other than it has to grab India’s telecom sector by the horns. The government of India finally ripped the comfortable sheets on which telecom companies were laying and demanded them to pay the license fee. And, like always happens, it rallied the telecom companies together against it – against the unjustified nature of the adjusted gross revenue.
However, now things have changed, the government has introduced several relaxations and thus, we are now more than ever capable of seeing the telecommunication sector grow.
That being said, that growth came at a cost. Thus, in this blog, we are going to revisit history and explain some of the facts that started this issue in the first place.
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The Government of India and its insistence on making telecom companies pay a high license fee
Among all the industries, one that has gone through the most changes over the years is the telecom industry. It is a transformative sector, capable of bringing India together. Furthermore, the telecommunication domain is more often than not the first target of many anti-national activities. And thus, the Department of Telecommunication insisted that only those companies can procure the license that is:
- Capable of maintaining the technical infrastructure of the telecommunication industry;
- And, have the finances to back it up.
To enforce that ideology, the government of India implemented the only way that seemed liable at the time – imposing high license fees.
The telecom companies were not so inclined to bow down. They complained that their current AGR dues are calculated by not only taking revenue generated from telecom activities but also non-telecom activities as well.
That led to many of us wondering why did the government stress taking both the operational and non-operational revenues into account.
The “true” reason behind the calculation of Adjusted Gross Revenue
Adjusted Gross Revenue calcultes as the operational and non-operational revenue of the telecom companies. The government’s insistence on taking a cut from the non-operational revenue was puzzling to many. And that’s when we realized the reason for the same.
Lack of trust in telecommunication companies. When it comes to sheer power, one can say that telecommunication companies have a lot. Their access to communication technology can damage the national interest if they are not careful. Therefore, the government decided to put a regulatory leash around them through a high license fee.
But we now live in an era where trust is important. And thus, the government had to change its mind.
What made the government of India change its mind?
The battle between the government and the companies was so lengthy that we wondered if we were ever coming out of this AGR Telecom Debate. However, as the government’s power grew, they realize that telecom companies should not suppress by them.
And thus, in 2021, at the behest of The Supreme Court, the government finally made several decisions:
- 4-year Moratorium on AGR dues
- Redefining Adjusted Gross Revenue
- Adding the term Applicable Gross Revenue (ApGR) in the regulations.
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Conclusion
Even though the storm of AGR Dues has passed, we need to remember history. It would ensure that we, as the telecommunication sector, don’t make the same mistake and work towards its growth.
