Pricing in Telecom for Service

Provider : Success Linked Vs Fixed

Price.
SUBMITTED BY: SANDESH PRASAD
MAHINDRA COMVIVA
Brief History Cash Flow AGR Pricing Conclusion

Brief History
An act to promote competition In 2015, the TDSAT (Telecom Disputes Settlement and
and reduce regulation to secure Appellate Tribunal) stayed the case in favour of
lower prices and better services telecom companies and held that AGR includes all
in the Industry receipts except capital receipts and revenue from
non-core sources

Cellular Operator
Telecommunication Supreme Court Supreme court upheld
Association of India,
Act, 1996 Decision, 2015 the definition of AGR
2005

In 2005, Cellular Operators In 2019, the supreme court upheld

Association of India (COAI) the decision of the DoT on the
challenged the government’s definition of AGR
definition for AGR calculation
Brief History Cash Flow AGR Pricing Conclusion

Cash Flow
◦ On 5 December 2016, Reliance Jio enters the market
◦ They are made publicly available with low tariffs which
in turn puts stress on the revenue of the already
struggling telecom operators
Brief History Cash Flow AGR Pricing Conclusion

AGR Calculations
◦ After the 2019 Supreme court
decision held up for the calculation of Gross Revenue:
AGR, Bharti Airtel faces a liability of
Rs. 62,187 crore and Vodafone faces a Revenue from operations incl. other operating
liability of Rs. 54,184 crore incomes And Other Incomes
◦ The remaining liability is with state-
owned BSNL and MTNL and some of

AGR
the shut or bankrupt telecom Adjusted Gross Revenue:
companies Gross Revenue
◦ Reliance Jio, which started operations Add:
in September 2016, owed Rs 60.52
crore to the government a) Revenue from operations other than telecom
activities
b) Receipt from USO Fund
c) Items of other Income
Brief History Cash Flow AGR Pricing Conclusion

Pricing – Success Linked Vs Fixed Price

Brief History Cash Flow AGR Pricing Conclusion

Conclusion
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