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Indian operators facing USD13bn bill following court ruling on fee charges

25 Oct 2019

Following a ruling by India’s supreme court which upheld a demand by the Department of Telecommunications (DoT), the nation’s mobile network operators (MNOs) will be required to pay a total of INR920 billion (USD12.9 billion) in overdue levies and interest. According to Reuters, with MNOs in India required to pay the regulator between 3% and 5% of their adjusted gross revenue in usage charges for frequencies, plus 8% of AGR (Adjusted Gross Revenue) as licence fees, the DoT and cellcos have been at odds over the definition of AGR. While operators are said to have argued that AGR comprise just revenue accrued from core services, the DoT for its part has claimed it should include all revenue.

In the wake of the court decision, India’s third largest cellco by subscribers, Bharti Airtel, put out a statement noting: ‘This decision has come at a time when the [telecoms] sector is facing severe financial stress and may further weaken the viability of the sector as a whole.’ Meanwhile, the Reuters report also cites mobile market leader Vodafone Idea as arguing that the court’s determination was damaging for India’s telecom industry, with it saying: ‘Today’s order has huge impact on two private operators while most of the other impacted operators have exited the sector.’

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