November 08, 2019

DoT Examining If Supreme Court Order On AGR Applies Also To Other Companies Which Own Valid Telecom Licenses

[ By Bobby Anthony ]


The Department of Telecom's (DoT) licensing division is in the process of checking if the Supreme Court order on telecom revenue applies to any user company of spectrum and also to those companies which own valid telecom licenses, after telecom companies brought it to the notice of the DoT informally.

According to sources, telcos brought it to the notice of the DoT that the SC definition or the DoT definition of the Adjusted Gross Revenue (AGR) applies to any entity which has taken a telecom service license, such as internet service providers (ISPs), satellite communications providers, cable operators and even companies in the power and railways sector.

Both legal experts and telcos have stated that this brings such companies also under the ambit of AGR-based dues. This would mean that all such companies, including public sector units (PSUs), also would have to pay the government if dues are actually going to be realized.

As the wider ramifications are slowly emerging of DoT's and Supreme Court-backed AGR, ministry officials has stated that licensees like PGCIL, RailTel, Internet Service Providers, Prasar Bharti, satellite communications providers and even cable operators would all come under that definition and their dues would also need to be calculated.

However, the details are being studied for such companies which are not telecom service providers.

These companies could suddenly be issued with demand notices running into crores of rupees and they may object to DoT not informing them about it for so many years about it, DoT officials have stated.

A senior telecom company executive has state that so far DoT has focused only on telcos but now it will have to see how others would pay. Both RailTel and PGCIL have ISP licenses of Grade A and RailTel is a managed telecom service provider. If dues will be calculated based on the overall revenue of the company, it will have to be studied with legal definition.

Meanwhile, the government has formed a Committee of Secretaries to work out a financial bailout package which may include lowering of spectrum charges.

The Committee of Secretaries, headed by Cabinet Secretary Rajiv Gauba, has been asked to examine “all aspects” of “financial stress” faced by service providers such as Bharti Airtel and Vodafone Idea as well as suggest measures to mitigate them. The panel has met only once so far.

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