You may have assumed that the adjusted gross revenue (AGR) saga, which apparently ended in 2020 with a number of Indian operators being asked to pay vast outstanding fees dating back to 1999, was now over. You may be wrong.
Regular readers will remember that in 2019 the Indian Supreme Court upheld a decision that operator income from non-telecom-related sources should be included in the AGR calculation.
However, now, according to Indian press reports, both Bharti Airtel and Vodafone Idea (recently rebranded as Vi) have gone back to the Supreme Court and argued that the suggested sums owed, calculated by the Department of Telecommunications (DoT), include some serious errors.
The same reports note that the Airtel filing goes as far as to say that duplicated revenue addition, incorrectly applied interest rates and failing to factor in payments already made, among other elements of the calculations, have added such a substantial amount to the final demand that every rupee mistakenly added to the principal amount increases Airtel’s final bill by eight rupees.
We already know that self-assessment of moneys owed offered by both operators came up with much lower figures than those suggested by the DoT. Airtel claims its AGR dues total $1.7 billion, at present exchange rates, compared to the $6 billion demanded by the DoT. Vi’s calculations put its AGR burden at just under $3 billion, but the DoT’s calculations come closer to $8 billion.
We seem to have got to this point because the DoT offered rough calculations to the court. Admittedly, it also showed willingness to work with the self-assessments while it completed its own calculations. In 2020, however, the Supreme Court, insisted on using DoT figures that, arguably, were somewhat rushed and calculated in ways that were not consistent across all DoT offices in India’s various regions.
So the court’s decision to accept what may be flawed figures is now being challenged. Vi, in particular, would benefit from a recalculation of debt, though it appears to be highlighting the alleged errors rather than asking for a recall of the earlier figures, which seems to be Bharti’s position.
All of which means that, assuming the court accepts there is a case to answer, the AGR controversy, now entering its third decade, is far from over.