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Internet service providers seek PMO help on revised AGR

Telecom operators pay levies such as license fees and spectrum usage charge (SUC) as a share of their revenue to the government. These payouts are calculated as a percentage of the adjusted gross revenue (AGR). The Department of Telecommunications (DoT) believes that such charges be levied on the basis of entire revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales. On contrary, service providers say that AGR should consist of revenues generated from telecom services only. On October 24, 2019, the Supreme Court of India has ruled in favour of DoT upholding that the telecom companies’ entire revenue should be considered while imposing the license fee and SUC.
Telecom operators pay levies such as license fees and spectrum usage charge (SUC) as a share of their revenue to the government. These payouts are calculated as a percentage of the adjusted gross revenue (AGR). The Department of Telecommunications (DoT) believes that such charges be levied on the basis of entire revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales. On contrary, service providers say that AGR should consist of revenues generated from telecom services only. On October 24, 2019, the Supreme Court of India has ruled in favour of DoT upholding that the telecom companies’ entire revenue should be considered while imposing the license fee and SUC.
NEW DELHI: Internet service providers have written to the Prime Minister’s Office seeking relief from any move by the telecom department to implement a Supreme Court order on adjusted gross revenue on all telecom license holders – and not just telcos.

Such a move would have “serious financial implications” on oil and gas companies, power producers, the railways, data centres and others that have taken telecom licences but were not part of the litigation involving telcos, the Internet Service Providers Association of India said in a letter to the PMO dated November 13.

It would lead to a “financial crisis in many small and medium ISPs that have operations in rural areas.”

“We urge you to intervene to avoid the unprecedented crisis as the licences, factual matrix, etc, are different and would require independent examination,” the association said asking for 'ways and means out of the situation' , in the letter marked also to telecom minister Ravi Shankar Prasad, the chief cabinet secretary and the secretaries of telecom, revenue, finance, law, IT and electronics and economic affairs.

While asking the government to ensure continuity of business and investments, the association said implementing the order on non-telecom companies may not be legally sustainable.

“Licences for different services need to be interpreted on the basis of the definition in the licence and not on the basis of migration package availed by some access providers in 1999,” it argued. Hence, other licenses would not be covered by the SC judgement, it contended.

Referring to Section 4 of the Indian Telegraph Act, ISPAI argued that the government should consider revenue from telecom services alone and exclude non-telecom and notional revenue.
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