SC verdict on AGR big setback, Vodafone Idea would be worst hit: Report

NEW DELHI: With Supreme Court ruling in favour of Department of Telecom (DoT) on the two decade old dispute over computation of adjusted gross revenue (AGR), Vodafone Idea would be worst hit considering the already stretched balance sheet, a report by ICICI Securities said on Friday.

“We see risk to our EBITDA estimates as license fees and spectrum usage charges (SUC) cost will rise on revised AGR definition. Telcos now face large liabilities as most of the disputed revenue line items are now allowed by the order to be part of AGR and the liabilities would be cumulative amount for past two decades,” the report stated.

ICICI Securities also mentioned that further liabilities are likely to arise as SUC are also computed as per cent of AGR, which can create more liabilities in future. The research firm also sees risk to its earnings estimate as telcos will now have to pay license fees and SUC on higher AGR base compared to earlier.