Telecom stocks slipped on Thursday after Supreme Court rejected telcos' definition of AGR (adjusted gross revenue). The share price of Vodafone Idea took a bigger plunge and fell over 18 percent intraday.
At 1:20 pm, the share prices' of Vodafone Idea, Bharti Infratel and Bharti Airtel plunged 18.58 percent, 4.34 percent and 7.31 percent on the NSE.
SC has delivered a massive setback to the Incumbent Telcos Bharti, Voda-Idea, R.Comm. SC has upheld the DOT's understanding of what constitutes AGR, has dismissed telcos' arguments as "frivolous" and in doing so has exposed the incumbent telcos to potentialities demands by DOT of up to 1.33 lakh crores.
SC has held that all revenues accruing to Telcos, except for termination Fee and roaming charges, will be a part of the AGR. Telcos had argued that non-telecom, non-core revenues should not be a part of the AGR.
The computation of AGR has been a legacy issue going back to 2005, with both the DOT and Telcos batting, across TDSAT, HCs, and SC, for their respective views on the computation of AGR.
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First Published: IST