Adjusted Gross Revenue: SC ruling deals Rs 70,000 cr blow to Airtel, Vodafone Idea

The decision by the Supreme Court on Adjusted Gross Revenue (AGR) will hit Airtel and Vodafone Idea by about Rs 70,000 crore, according to industry estimates. The additional payout could hurt the prospects of both the operators even as they are struggling to fight the onslaught by Reliance Jio.

The dues are on account of penalty and interest on licence fee unpaid by the operators. Operators have to pay 8 per cent of their annual revenues — called Adjusted Gross Revenue — as licence fee. The crux of the entire dispute is what constitutes the operator’s AGR. While DoT has taken a view that revenues earned by operators from interest earned from bank deposits or forex gains will be considered as operator’s revenue while calculating the licence fee, the industry opposes the view.