Bharti Airtel recorded a massive loss for its fiscal Q2 after making a near $4 billion provision to cover an expected increase in fees following a high court ruling regarding the definition of adjusted gross revenue (AGR).
Last month, India’s Supreme Court affirmed the Department of Telecommunications’ position that AGR should cover all revenue, including non-telecoms related activities. At the time, Airtel said the judgement would hurt the viability of the sector, which is burdened by huge debt.
In a statement, Airtel said while it hopes the government will reconsider the decision given the fragile state of the industry, it had already set aside INR284.5 billion ($3.96 billion) for what it estimates it will owe in unpaid licence fees and spectrum usage charges.
Gopal Vittal, Airtel’s MD and CEO for India and South Asia, said it continues to engage with the government and is evaluating various options available.
The one-off charge resulted in a net loss of INR230 billion in the July to September period, with consolidated revenue rising 4.9 per cent year-on-year to INR211 billion.
Vittal said in India it posted positive revenue growth on the back of various initiatives, and “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”.
He noted the company will require significant additional financing to discharge its obligations under the judgement: “This represents a material uncertainty whereby, it may be unable to realise its assets and discharge its liabilities in the normal course of business, and accordingly may cast significant doubt on the group’s ability to continue as a going concern.”
The court decision followed the beginnings of a recovery in India, with revenue increasing 5.7 per cent to INR154 billion, driven by 7.4 per cent growth mobile turnover to INR108 billion. ARPU increased 28.4 per cent to INR128.
Its mobile user base dropped 15 per cent from a year earlier to 279 million. Monthly data usage per customer jumped to 13.1GB from 9.22GB.
Revenue in Africa increased 12.6 per cent to $853 million, with data revenue growing 39.7 per cent to $229 million.
Its subscriber base grew 10.4 per cent to 104 million, while ARPU rose 2.4 per cent to $2.80.
Airtel Money revenue increased 50.9 per cent to $79 billion, with the number of active customers increasing 20 per cent to 15.5 million.Subscribe to our daily newsletter Back