Blitz Bureau
NEW DELHI: A day after the Supreme Court ordered the Government to reassess the adjusted gross revenue (AGR) dues from Vodafone Idea for up to FY17, Bharti Airtel will now take up its case with the Government for a similar reassessment, reports Mint.
“We welcome the fact that the recent order of the Supreme Court permits the Government to undertake a comprehensive assessment, reassessment and reconciliation of the AGR dues including interest and penalties up to the financial year 2016-17. The order has been made in the petition of Vodafone Idea. We are now planning to take up our matter with the Government,” Bharti Airtel vice chairman and managing director Gopal Vittal told analysts in an earnings call.
Vittal said the the company always maintained that the AGR judgement of 2019 was a “body blow” to the industry. “The fact that even errors of calculation were not entertained is even more disappointing,” Vittal said.
AGR represents a portion of a telecom company’s gross revenue that is considered for regulatory payments. Telcos pay 8 per cent of AGR as licence fee to the Government, inclusive of contribution to the Digital Bharat Nidhi fund, which is at 5 per cent of AGR.
The Supreme Court on the other hand clarified that the Government could reassess and reconsider all of Vodafone Idea’s AGR dues as of FY17, including interest and penalties, delivering significant relief to the cash-strapped telecom company.
The order, however, pertains only to Vodafone Idea as other companies did not file any petition in the Supreme Court on the additional AGR demand from Department of Telecom (DoT) for up to FY17 period.
In April, Airtel had urged the DoT to convert its AGR dues of about ₹40,000 crore into equity, which would give the Government a 3-4 per cent stake in India’s second-largest telecom operator.
To be sure, in May, the Supreme Court had dismissed pleas by Bharti Airtel, Vodafone Idea, and Tata Teleservices seeking a waiver on interest, penalty, and interest on penalty on pending AGR dues.
“We just wanted a non-discriminatory level-playing field in terms of an option to convert,” Vittal had said then. “Whether we will convert or not is a decision for the board to take… We wanted a clarification from the Government whether we had the option or not.”
Last week, the Sunil Bharti Mittal-led telecom operator reported its September-quarter results. The company reported strong earnings driven by a surge in mobile data consumption, an expanding subscriber base, and a recovery in the enterprise segment, Airtel Business, after three quarters of a fall in revenue.
Bharti Airtel reported a revenue of ₹52,145 crore in the September quarter, rising 25.7 per cent from the previous year, and 5.4 per cent from the preceding quarter’s ₹49,463 crore, according to the company’s earnings release. The company’s revenue was largely driven by an increase in its mainstay mobile services business, with a focus on premium services and growth in Airtel Africa.
Net profit rose 89 per cent from a year earlier to ₹6,792 crore, helped by lower losses at its associate and joint ventures during the quarter. A lower finance cost also improved the profit during the quarter. On a sequential basis, Airtel’s net profit rose 14.19 per cent from ₹5,948 crore in the preceding quarter.