How SC ruling on Adjusted Gross Revenue will affect you

The Supreme Court last month upheld the government's way of calculating telecom revenue, on which licence fee and spectrum usage charges are computed. As per the initial calculations, access players like Airtel, Vodafone Idea and other telecom operators may have to pay the government a whopping Rs 1.42 lakh crore.

For pre-paid telecom consumers, free talktime, rebates and late fee waivers could be a thing of the past following the Supreme Court’s ruling on Adjusted Gross Revenue.

According to the Supreme Court’s ruling, telecom operators cannot exclude any revenue they earn, including notional income or revenue forgone by the operator. For example, an operator usually offers a voucher of Rs. 100 for 100 minutes of talk time and adds another extra twenty minutes without charges. Until now the operator paid revenue share to the government on the Rs. 100 that he earned selling that voucher. Post the Supreme Court’s order, the operator will have to pay a revenue share on Rs. 120, adding the revenue waived for the additional two minutes of free talk time.

It’s not just the telecom operators that have been hit by the Supreme Court’s ruling on Adjusted Gross Revenue, even consumers will bear the brunt of the decision. Due to this ruling, operators will stop offering discounts and waivers because they would not like to be in a situation where they would have to pay a revenue share to the government on an income that they did not receive.

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