Power Grid’s telecom revenue is just 2 percent of its total revenue with almost 95 of the revenue flowing from power transmission operations.
November 28, 2019
Public sector companies such as Power Grid, Railtel, GAIL, OIL, and DMRC may form a joint forum to oppose any move by Department of Telecommunications (DoT) to seek additional license for their limited telecom and internet service operations on the basis of recent Supreme Court ruling on adjusted gross revenue (AGR).
On October 24, the Supreme Court ruled that AGR for telcos should include all revenue accrued to carriers, including that from non-core activities, backing the DoT’s stance in a 16-year-old case but putting additional license fee burden of Rs 92000 crore on telecom companies.
As per media reports, Power Grid Corporation of India Ltd (PGCIL) has paid license fee of Rs 59 crore (8 percent of revenue) to DoT for ISP and NLD services as per the terms of the contract on telecom revenue of Rs 742 crore. Power Grid’s telecom revenue is just 2 percent of its total revenue with almost 95 of the revenue flowing from power transmission operations.
As per industry sources, if AGR is calculated as per new DoT definition, Power Grid itself would require to fork out over Rs 40,000 crore. The impact would be much higher for GAIL and other non-telecom PSUs. Total dues from these non-telecom companies could work out to over Rs 1.5 lakh crore.
