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Need to revisit present definition of AGR, Jio

Reliance Jio, in a letter to the Telecom Regulatory Authority of India (TRAI), has asked for the implementation of the revised definition of Adjusted Gross Revenue in line with to the telecom reforms announced by the Central Government on September 15.

“There is a need to revisit the present definition of AGR and align it with the decision of the Cabinet dated 15th September 2021 in letter and spirit so that telecom service providers are not required to follow a circuitous route to provide a one-stop solution to customers,” Jio wrote in its letter to TRAI.

“The Gross Revenue (GR) shall mean the revenue actually received/ realizable /receivable (i.e. accrual basis) directly from the customer(s) on account of provision of access services licensed under Section 4 of the Indian Telegraph Act, 1885. For the purpose of this computation, Gross Revenue shall mean the revenue accrued on account of the above mentioned telecom services, duly reconciled with audited financials, and also disclosed in the TSPs statement of revenue and licence fee for that quarter / period,” said Jio, proposing their definition of AGR.

A senior industry executive said, “when DoT went to revise the definition of AGR, they used one of the older definitions that was proposed by TRAI. Which means certain older problems have creeped into this new AGR definition as well. For instance, handsets or equipment sold by operators are not part of telecom services, but now these have been brought back into the new definition of AGR. Equipment that operators might provide to bolster infrastructure to enhance their services are also part of the definition. For instance, a home signal enhancer or some other device.”

According to executives, the main problem with the new definition of AGR is that it will bring back the administrative challenges that plagued the older definition as well.

“With the coming of 5G, operators might need to install additional equipment for tower densification, densification of fibre, which will become a part of AGR as well, even though they are a telecom services directly,” said the executive.

Another senior member of the telecom industry concurs with Reliance, saying that more clarity is needed in the AGR definition, “The government should be making money on the revenue from telecom services, to that extent devices are a different line of business. TRAI should finalise a clearer definition, since no operator will want to pay undue tax, which would mean that they will set up another unlicensed entity to offer these devices, making the process more complicated.” The Outreach

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