TRAI starts consultation process on AGR definition

Telecom regulator TRAI today invited views from interested parties on the definition of the contentious issue of adjusted gross revenue of service providers on which government charges a fee.
"The consultation (on Definition of Revenue base for the reckoning of licence fee and spectrum usage charges) has been undertaken by the Authority suo motu," The Telecom Regulatory Authority of India said in a statement.
The regulator said that it has started this exercise to review existing definition of gross revenue earned by telecom operators and various deductions allowed in it to derive adjusted gross revenue (AGR) in the context of changes made in National Telecom Policy, 2012.

Under the policy, companies are required to purchase spectrum through auction whereas under previous regime it was allocated along with licence or on meeting certain criteria with respect to subscriber base.
The concept of AGR started after government moved from charging fixed licence fees to revenue sharing basis in 1999.
TRAI said that definition of AGR has been litigated since 2003, but clarity emerged on the nature of the contractual relationship between the Government as authority to grant licence and telecom operators.

"Litigation regarding the computation of LF continues before the TDSAT in the case of individual demands made on telecom service providers (TSPs)," TRAI said.

The government has reduced licence fee from around 15 per cent at the time of introduction in 1999 to about 8 per cent at present.
TRAI has fixed September 1 as last date for comments and September 8 for counter comments.