Published: Fri, November 15, 2019
Markets | By Otis Pena

Airtel, Voda-Idea report combined loss of ₹73,000 cr

Airtel, Voda-Idea report combined loss of ₹73,000 cr

While Vodafone Idea posted a loss of Rs 50,921 crore - the highest-ever quarterly loss by any corporate in India - Airtel reported loss to the tune of Rs 23,045 crore.

The company stated that Rs 30,774.5 crore out of this, was a one-time loss the company incurred due to the recent SC verdict on Adjusted Gross Revenue.

Earlier on Thursday, Singapore-based Singtel posted a second-quarter loss of SGD 668 million ($491.29 million) hurt by a one-time charge recorded by Bharti.

In its October 24 verdict, the Supreme Court of India ruled in favour of the government's method of calculating operators' revenue, a decision that means carriers must pay about $13 billion combined - mostly license and spectrum fees built up over years.

"The Company is hopeful of relief and in the absence of the same, has provided for an additional amount aggregating Rs 28,450 crore as a charge for the quarter with respect to the license fee as estimated based on the court judgement and spectrum usage charges (SUC) as estimated based on the definition of AGR", the company said in a statement.

Saddled with $14 billion of net debt, Vodafone Idea is fighting for survival after India's top court last month ordered it to pay fees the government said were due from prior years.

The company's India revenues increased by 3 per cent on year-on-year basis to Rs 15,361 crore. The figure for the same quarter in 2018 had been Rs 11,270 crore.

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The problem started when telecom operators migrated to a new system offered by the government in 1999 under which they agreed to share a certain percentage of revenue with the government.

Vodafone Idea said its $7.14 billion loss also provides for 256.8 billion Indian rupees ($3.6 billion) in outstanding payments surrounding the aforementioned court case.

Bharti Airtel, which has also been hit hard by the Supreme Court ruling on statutory dues, has provisioned 342 billion rupees to cover adjusted gross revenue related liabilities. Consolidated EBITDA was at Rs 8,936 crore while onsolidated EBITDA margin is at 42.3 per cent, up 10.8 per cent YoY. Operators argued that AGR should comprise only revenue from telecom services, but the DoT insisted that it should include all revenue earned by an operator.

"The company's ability to continue as going concern is dependent on obtaining the reliefs from the government", Vodafone Idea said in a statement late Thursday.

The company is in the process of filing a review petition with the Supreme Court over the AGR judgement.

Vodafone Idea, Airtel and other telecom operators may have to pay the government a whopping Rs 1.4 lakh crore following the recent Supreme Court order, according to an ANI report. Through a spokesperson, Gopal Vittal, MD and CEO of Bharti Airtel's India and South Asia business, said, "We continue to engage with the government and are evaluating various options available to us". Mobile data traffic has almost doubled to 4,497 PBs in the quarter as compared to 2,478 PBs in the corresponding quarter a year ago.

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