AGR woes: Vodafone Idea, Airtel suffer quarterly loss totalling Rs 74,000 cr

Vodafone Idea and Bharti Airtel reported a whopping combined loss of nearly Rs 74,000 crore in the September quarter.

New Delhi: Vodafone Idea and Bharti Airtel on Thursday reported a whopping combined loss of nearly Rs 74,000 crore in the September quarter as the leading telecom players were hit by statutory dues arising from a recent Supreme Court ruling.

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.

In 2018 December quarter, Tata Motors logged biggest quarterly loss of Rs 26,961 crore.

Vodafone Idea and Airtel have made provisions for their liabilities arising from the Supreme Court order in their latest September quarter results.

The apex court has upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which has to be paid as licence and spectrum fee to the exchequer.

Stung by colosal losses, Vodafone Idea said its ability to continue as a going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy.

The company is also in the process of filing a review petition against the Supreme Court order.

Vodafone Idea has estimated a liability of Rs 44,150 crore post the apex court order, and made a provision of Rs 25,680 crore in the second quarter of the current fiscal.

The company said it has "accounted for the estimated liability of Rs 27,610 crore related to license fee and Rs 16,540 crore related to Spectrum Usage Charges up to September 30, 2019, including the interest, penalty and interest... of Rs 3,3010 crore".

Meanwhile, Bharti Airtel posted a staggering Rs 23,045 crore net loss in the latest September quarter due to provisioning of Rs 28,450 crore in the aftermath of the Supreme Court ruling.

The company said its net loss was on account of exceptional charge pertaining to the provisioning of Rs 28,450 crore towards the AGR dues, that included principal of Rs 6,164 crore, interest of Rs 12,219 crore, penalty of Rs 3,760 crore, and interest on penalty of Rs 6,307 crore.

Airtel CEO for 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".

Airtel management said it is reviewing its options and remedies available, including filing petitions before the SC and also seeking other reliefs, with others affected in the industry, from the government.

Airtel said that the group will need significant additional financing to discharge its obligations under the court judgement.

Shares of Vodafone Idea on Friday surged over 10 per cent despite the company posted a tremendous loss of Rs 50,921 crore - highest ever loss posted by any Indian corporate - for September quarter.

On the BSE, the stock witnessed a jump of 10.16 per cent to Rs 3.25 in the morning session. Later on, the scrip shed some of its gains and was trading 4.41 per cent up at Rs 3.08.

The stock moved up by similar margins on the NSE in early trade. It was trading at Rs 3.05, up 3.39 per cent.

As per latest estimates by Department of Telecommunications, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore.

The remaining liability is with state-owned BSNL/ MTNL and some of the shut/ bankrupt telecom companies.

On Wednesday, the DoT shot off notice to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court.

The DoT has given option to telecom operators to clear all the dues on self-assessment basis.