What is AGR

Adjusted Gross Revenue (AGR) is the revenue that ISPs and telecom operators earn from providing telecom services, after making certain allowable deductions. The Department of Telecommunications (DoT) has specified what can be deducted, such as charges passed on to other telecom service providers for interconnection.

The AGR includes all revenue earned by the ISP, except for certain permitted deductions. Typically, these deductions include revenue from services like internet access charges paid to other service providers, roaming charges passed on to other networks, and taxes paid to the government.

Non-telecom revenue, such as income from dividends or interest, has historically been a point of contention in the calculation of AGR.

ISPs are required to file their AGR statements regularly with the Department of Telecommunications (DoT). This filing is usually done on a quarterly and annual basis.

The filing must detail the gross revenue earned, the deductions claimed, and the resulting AGR. Based on this AGR, the ISP calculates the license fees and spectrum usage charges due to the government.

The license fee is typically a percentage of the AGR. This percentage can vary depending on the type of license and the services provided.

Spectrum usage charges are also calculated as a percentage of the AGR and are paid in addition to the license fee.

The calculation of AGR has been a subject of regulatory scrutiny and legal challenges in India. Disputes have arisen over what should be included or excluded from the AGR, with significant financial implications for telecom operators.

ISPs must comply with the AGR filing requirements, and failure to do so can result in penalties, interest on unpaid fees, or even suspension of their licenses.

AGR is a crucial component for the government to collect revenue from telecom operators, which is a significant source of income.

Ensuring accurate AGR filing is essential for ISPs to remain in compliance with their licensing terms and to avoid legal or financial penalties.

Disputes over AGR calculations have had a substantial impact on the telecom sector, influencing financial health and investment decisions of telecom companies.