Airtel Q2 stung by INR224bn charge from AGR case

15 Nov 2019

Indian telecoms group Bharti Airtel has reported a net loss of INR230.4 billion (USD3.2 billion) for the three months ended 30 September 2019, compared to a net profit of INR1.2 billion a year earlier, on the back of an INR223.9 billion exceptional charge related the Supreme Court’s ruling last month on Adjusted Gross Revenue (AGR). The group recorded total consolidated revenues of INR211.3 billion for its Q2, an increase of 4.9% year-on-year, whilst EBITDA grew to INR89.3 billion from INR63.4 billion a year earlier. Loss before tax and exceptional items, meanwhile was INR6.2 billion compared to INR18.5 billion a year earlier and INR15.3 billion in the preceding quarter. In terms of subscribers, Airtel counted a total of 411.424 million users across its Indian, South Asian and African divisions. The figure represented an increase from the 403.695 million total reported in June 2019 but was nevertheless down from 448.062 million in September 2018 although the subscriber losses were entirely contained to Airtel’s Indian unit.

As previously reported by TeleGeography’s CommsUpdate, India’s Supreme Court ruling on 24 October on AGR ended a decade-long dispute between the industry and the Department of Telecommunication (DoT). The ruling backed the DoT’s definition of AGR – on which mobile providers’ licence fees are based – which includes turnover from non-core sources, and gave the companies affected 90 days to pay the regulator the outstanding dues and report compliance. In total, Airtel said it has provided for INR168.2 billion relating to license fees (comprising a principal figure of INR32.1 billion, interest of INR70.0 billion, penalty of INR24.9 billion and interest on the penalty of INR41.2 billion) and INR116.4 billion related to spectrum usage charges (SUCs). Airtel CEO Gopal Vittal was quoted as saying that the company is continuing to ‘engage with the government and are evaluating various options available to us. We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry.’