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Telecom Operators’ AGR Drops to 5-Year Low

The below-cost pricing in the telecom sector continues to take its toll, with the industry’s adjusted gross revenue (AGR) declining 7.4% Q-o-Q and 12.6% Y-o-Y to Rs 35,697 crore during the January-March quarter of 2018, which is also the industry’s worst performance in the last five years.

According to Trai’s latest revenue collection numbers for the period, even though the gross revenue (GR) rose 1.82% Q-o-Q to `62,198 crore, it fell 1.76% on a year-on-year basis.

However, the decline in AGR, on which the government collects spectrum usage charge (SUC) and licence fee (LF) from telecom operators, is more worrying. The AGR for the period at `35,697 crore is the lowest since the same period in 2013, when it stood at `35,279.50 crore.

Telecom operators pay 3-5% of adjusted gross revenue (AGR) as SUC and 8% of AGR as licence fee to the department of telecommunications (DoT).

Declining tariffs have also impacted the industry’s average revenue per user (Arpu). For instance, industry Arpu for January-March fell 11.3% Q-o-Q to `71.62, while on a Y-o-Y basis, the fall was steeper at 20%. – Financial Express

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