Adjusted Gross Revenue, Meaning, Components, Impact

Adjusted Gross Revenue is the share of revenue that telecom operators in India needed to pay to the Department of Telecommunications as part of their license agreement. It includes earnings from telecom services (like calls, data, SMS, roaming, value-added services) as well as non-telecom revenues like interest income, asset sales, rent and foreign exchange gains to the Department of Telecom Communication. In this article, we are going to cover Adjusted Gross Revenue, its components, supreme court decisions.

Adjusted Gross Revenue 

Adjusted Gross Revenue is the metric used by the Department of Telecommunications in India to calculate the license fee and spectrum usage charges payable by telecom operators. According to the DoT, Adjusted Gross Revenue is not limited to core revenues from telecom services alone; it also includes earnings from non-telecom sources, such as interest from deposits, gains from asset sales, rental income, and dividends.

AGR Supreme Court Verdict (2019)

In October 2019, the Supreme Court of India delivered a landmark judgment upholding the DoT’s definition of Adjusted Gross Revenue. The Court ruled that telecom operators must include non-core revenues in their AGR calculations. Consequently, it directed the companies to pay dues amounting to over ₹1.47 lakh crore including license fees, SUC, accrued interest, penalties, and interest on the penalties. This ruling finally increased the financial liability of telecom operators.

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AGR Legal Dispute and Supreme Court Decisions 

The Supreme Court’s verdict on Adjusted Gross Revenue had the following legal implication: 

• The AGR controversy dates back to the early 2000s when telecom companies challenged the inclusion of non-telecom revenues in AGR, arguing it unfairly inflated their dues.
• The Supreme Court sided with the DoT’s broader interpretation, thereby increasing the payable dues exponentially.
• On May 19, 2025, the Supreme Court rejected petitions by Vodafone Idea, Bharti Airtel, and Tata Teleservices seeking waiver of interest and penalties on AGR dues. The Court described these appeals as “misconceived,” reaffirming its strict stance.

Adjusted Gross Revenue Components

Adjusted Gross Revenue has the following components:

1. Telecom Service Revenues: Includes earnings from call charges, SMS, data services, roaming, interconnection charges, and value-added services.
2. Non-Telecom Revenues: Covers interest income, dividend earnings, capital gains, rental income, foreign exchange gains, etc.
3. Exclusions: Certain items, such as GST (if already part of gross revenue) and revenue shared with other service providers (like roaming charges), are excluded.

AGR Financial Impact on Telecom Operators

The Adjusted Gross Revenue had the following impact on telecom operators:

• Vodafone Idea (Vi): With AGR dues of about ₹58,000 crore, Vi has warned of severe financial distress, stating it may not survive beyond FY 2025–26 without government intervention.
• Bharti Airtel: Liable for around ₹43,980 crore in AGR dues. Although financially stronger than Vi, Airtel also sought relief, which was denied by the Court.
• Tata Teleservices: Similarly burdened, facing significant dues that worsen its financial challenges.
• The AGR dispute has become a turning point in India’s telecom sector. While the government has announced reforms to ease industry-wide financial pressure, the Supreme Court’s uncompromising interpretation of AGR limits the scope for relief. The case highlights the tension between revenue protection for the exchequer and the survival of private telecom players.