Adjusted Gross Revenue

After the liberalization of Telecom sector in 1994, fresh licenses were given to the operators by charging a fixed fee. In 1999, the Indian Government launched the revenue sharing model for telecom operations. Under this model, telecom service providers are required to share a certain percent of their Adjusted Gross Revenue (AGR) with the government.

What is AGR?

AGR is the usage and licensing fee charged by the Department of Telecommunications (DoT) from the telecom operators.

Key Points for UPSC Prelims

• The fee out of Adjusted Gross Revenue is divided into two – Annual License Fee (LF) and the Spectrum Usage Charges (SUC).
• The LF is set at 8% of AGR while the SUC varies from 3 to 5% of AGR.
• There has been a tussle between the Dept. of telecommunication and the telecom operators over the definition of AGR.
• DoT states that AGR includes both the direct revenue and non-operational revenues, whereas telecom operators argue that AGR includes only the direct revenue from telecom operations.

 Union Cabinet approves next round of Spectrum Auction

• The Union Cabinet approved guidelines for the next round of spectrum auction after 4 years since the last auction.
• This spectrum auction is expected to start in the last week of January 2021.
• The Union Cabinet has approved spectrum auction in different frequency bands- 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz for a validity of 20 years.
• A total of 2251.25 MHz frequency band is being offered with a total valuation of Rs. 3,92,332.70 crores.
• The successful bidders will have an option to pay the entire amount at once or an option to pay a certain amount and remaining in 16 equated annual installments, after a moratorium of two years.

Successful bidders will also have to pay 3% Adjusted Gross Revenue (AGR).