Bharti Airtel posts ?15,933 crore loss in Q1 on massive AGR-related provision

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Bharti Airtel posts ?15,933 crore loss in Q1 on massive AGR-related provision

NEW DELHI: Bharti Airtel Ltd on Wednesday posted a consolidated net loss of ?15,933 crore in the April-June quarter as the company undertook a massive ?11,746 crore charge, primarily for incremental provision and interest related to Supreme Court’s order on adjusted gross revenue definition last year.

In the corresponding quarter last year, the communications giant had posted a consolidated loss of ?2,866 crore.

“Consequently, without prejudice and on prudence, during the quarter ended June 30, 2020 the (Bharti Airtel) group has further recorded an incremental provision of ?107,444 million, including net interest on total provision created considering interest rate as per the affidavit filed by DoT on March 16, 2020 with effect from the date of Court Judgement,” the company said in a filing with exchanges.

Operationally, the company had a strong quarter despite the covid-19 pandemic causing an unprecedented disruption.

Consolidated revenue from operations grew 15.4% year-on-year to ?23,939 crore.

More importantly, Bharti Airtel reported a second straight quarter of positive operating income for its core business of mobile services in India at ?165 crore. The business clocked revenue of ?12,877 crore for the quarter, up 18.5% yoy.

The company’s average revenue per user for India mobile operations were ?157 per user per month, slightly higher than the ?154 in the March quarter. With increased focus on attracting high-value 4G customers, Bharti Airtel has managed to increase its revenue metrics, and now commands a higher ARPU than even rival Reliance Jio Infocomm Ltd.

While Reliance Jio will report its April-June earnings on Thursday, in January-March it had posted an ARPU of ?130.6 per user per month.

During April-June, the company recorded a “slower” 2 million net additions in the number of 4G customers at 138.3 million due to the stringent covid-related lockdown in April and also in first half of May.

With most employees working from home, and with limited fibre internet penetration, data usage per subscriber reached the highest-ever level of 16.3 GB per month, up 73% yoy.

“We are going through an unprecedented crisis caused by COVID. Despite this, our teams have served the country well and kept our customers connected. Data traffic growth surged by 73% YoY even as 4G net additions slowed down to 2 million caused by supply chain shocks in the device eco system,” Gopal Vittal, Bharti Airtel’s chief executive officer for India and South Asia, said in a statement.

In an October ruling, the Supreme Court had upheld DoT’s definition of AGR and asked mobile operators to pay levies based on that definition, along with interest on the principal amount and penalty.

While the Department of Telecommunications had estimated Bharti Airtel’s dues at ?43,980 crore, including the dues of Telenor India, it had initially asked all operators to do a self-assessment of dues. Bharti Airtel had pegged its dues to the DoT at ?13,004 crore, and paid the entire amount plus an extra ?5,000 crore to cover an differences.

However, it received a massive setback in March after the Supreme Court shot down the telecom ministry’s self-assessment directive and asked the government to stick to its original demand.

News Source:- livemint

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