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Vodafone Idea tanks 39% on AGR verdict, Airtel shrugs off concerns

  • IASbaba
  • January 17, 2020
  • 0
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Vodafone Idea tanks 39% on AGR verdict, Airtel shrugs off concerns

Part of: GS Prelims Economy and GS Mains III–Tax Evasion

In news:

  • Shares of Vodafone Idea Ltd tanked 39.3% on Friday, a day after the Supreme Court rejected the review petition by Vodafone Idea and Bharti Airtel challenging the apex court’s 24 October order on adjusted gross revenues (AGR)

From prelims point of view:

What is AGR?

  • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
  • It is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively.

How is it calculated and what’s the contention?

  • As per DoT, the charges are calculated based on all revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales. Telcos, on their part, insist that AGR should comprise only the revenues generated from telecom services.

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