AGR liability, Airtel posts shocking 23,045 crore net loss in Q2 provisions
Bengaluru, India-November15, 2019: Telecom operator Bharti Airtel on Thursday posted a staggering Rs 23,045 crore net loss for the second quarter ended September 30, due to provisioning of Rs 28,450 crore in the aftermath of the Supreme Court ruling on statutory dues.
The Sunil Mittal-led company said the apex court judgement, which had upheld government's way of calculating revenue of telcos (on which statutory liabilities like licence fee and spectrum usage charges are computed) -- has "significant financial implication for the company".
he company had recorded net profit of Rs 119 crore in the same quarter previous year; although it said that year-on-year numbers were not comparable due to adoption of new accounting standard. "...the liabilities / provisions as at September 30, 2019
aggregate Rs 34,260 crore (comprising of principal Tof Rs 8,747 crore, interest of Rs 15,446 crore, penalty of Rs 3,760 crore and interest on penalty of Rs 6,307 crore)," Airtel said in a statement. Airtel CEO, India and South Asia, Gopal Vittal hoped that the government will take a considerate view on the adjusted gross revenue (AGR) matter given the "fragile state of the industry".
The Supreme Court, last month, had upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer. Old telecom operators Bharti Airtel and Vodafone Idea were supposed to take the maximum hit on the payment of statutory dues to the government. The Supreme Court has allowed three months to the affected telcos to pay amounts due to the DoT, and on Wednesday the government shot off notice to telecom operators to pay their revenue share dues within the timelines stipulated by the court.
Bharti Airtel Limited is a leading global telecommunications company with operations in 18 countries across Asia and Africa. Bharti Airtel is a leading and most trusted provider of ICT services in India and offers a diverse portfolio of services to enterprises, governments, carriers and small and medium business.
"Despite being a seasonally weak quarter, we witnessed positive revenue growth in Q2 on the back of various initiatives aimed at providing superior differential services through our 'Thanks' platform. We continue to witness strong data traffic growth of about 81 per cent year-on-year and added about 8 million 4G customers on our network during the quarter," Vittal said.
Bharti Airtel shares closed at Rs 362.65 apiece, down by 1.59 per cent compared to previous close on the BSE.