TRAI issues fresh recommendations on AGR

Category: Government | No Comments | Posted on September 25, 2006

Following a TDSAT directive, the Telecom Regulatory Authority of India (TRAI) has come out with recommendations on activities to be taken into account for calculation of an operators’ Adjusted Gross Revenue (AGR).

What is AGR?

Telecom operators calculate their revenue and pay revenue share to the government on the basis of AGR.

Activities of an operator included in AGR:

• Sale of handsets or telecom equipment if bundled with telecom service
• Interest calculated on refundable deposit from subscribers
• Vendor’s credit
• Revenue from rent of towers and dark fibers
• Payment received on behalf of third parties
• Receipt on account of Acess Deficit Charge
• Discounts and rebates given to customers

Activities of an operator excluded from AGR:

• Revenue from discernible and standalone sale of handsets or telecom equipment not bundled with telecom service
• Income from dividend
• Capital gains unless receipts have come from telecom activities
• Gains from foreign exchange fluctuations and reversal of provisions

The industry has been given six weeks’ time to seek clarification on the issue.

Sources say the industry may seek clarification on areas like vendor’s credit and discounts given to customers, which were earlier waived from the calculation of AGR.

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