Telcos’ AGR liabilities eroded benefits from tariff hikes: Crisil

New Delhi: The liability of Rs 1.5 lakh crore related to adjusted gross revenues (AGR) of telecom companies has eroded the benefits of tariff hike taken in December last year and pulled back companies’ return on capital employed (ROCE) to 4%-5%, CRISIL Research said.

“Had the AGR liability not panned out as it did, the tariff hikes undertaken in December 2019 could have improved the industry’s RoCE to 7% in fiscal 2021 and to 9% in fiscal 2022, from lows of 3% in fiscal 2020,” the ratings firm said.