Govt unable to intervene in AGR issue, says commerce minister

17 Dec 2019

Indian Minister of Commerce and Industry Piyush Goyal has warned that the government cannot intervene in matters relating to the Supreme Court’s ruling on Adjusted Gross Revenue (AGR). The Economic Times cites the minister as saying that the government cannot take action on the issue ‘proactively or suo motu,’ adding that the state was nevertheless ‘in continuous dialogue’ with the industry. The AGR issue is between the Supreme Court and licence holders, the official went on. As previously reported by TeleGeography’s CommsUpdate, the ruling defined AGR – the figure on which India’s telecom licence fees are based – to include revenue from sources unrelated to telecom services. As such, the industry is facing a bill of around INR1.47 trillion (USD20.7 billion), whilst non-telcos that hold licences are estimated to owe a further INR2.28 trillion. Whilst Mr Goyal was sympathetic to the telco’s situation, he noted that government-backed entities such as railway and gas firms RailTel and GAIL and telco Bharat Sanchar Nigam Limited (BSNL) were also facing substantial bills as a result of the court’s decision. For its part, BSNL confirmed this week that it has asked the Department of Telecommunications (DoT) to waive its AGR dues of around INR49.9 billion. The loss-making operator’s fees include a licence fee of INR21.0 billion and spectrum usage charges (SUC) totalling INR28.9 billion.

In a related development, Telecom Minister Ravi Shankar Prasad has criticised statements from Vodafone Group’s leadership that the telco may have to withdraw from the market if the government does not provide relief. Vodafone Group is stakeholder in Vodafone Idea, one of the market’s largest cellcos and one of the worst affected by the AGR decision. ‘I don’t appreciate this kind of statement,’ the official was quoted as saying, adding: ‘We have given all the opening for doing business but no one should dictate terms on us.’ Mr Prasad went on to say that the ministry had done its best for the sector by offering operators a longer period to pay for spectrum as well as a two-year moratorium on spectrum payments.