Bharti Airtel has said that the company was hopeful that the government will take a ‘balanced approach’ on the latest issue of adjusted gross revenue (AGR) to ensure long-term viability of the industry.
Senior leadership of Airtel, in an investor call on Wednesday said that telecom operators in India have invested billions of dollars in developing the sector and providing world-class services to customers, and the latest decision from Supreme Court (on AGR) comes at a time when the sector is facing severe financial stress.
Badal Bagri, Chief Financial Officer at Airtel said: “We are evaluating the judgment in detail and its overall implication and we won’t be able to comment on it much.” The senior management including Gopal Vittal, Managing Director and Chief Executive Officer (India & South-Asia), did not wish to comment much on the subject even as questions around the burning issue and its impact on the company continued to dominate the call.
Commenting on the latest development of a Committee of Secretaries (CoS) being set up by the government to suggest ways to mitigate financial stress in the sector, Bagri said: “It is indeed in the best interest of all parties to formulate a constructive mechanism to ensure large levies including this one at hand can be resolved in a fair manner.”
According to the Department of Telecommunications’ (DoT) calculations, Airtel faces a liability of around ₹42,000 crore including licence fee and spectrum usage charges. But the company has not received any communication yet from the DoT and only when it gets clarity, it can show the figures in its balance sheet. Owing to such developing issues, Airtel which was supposed to announce its second quarter and half yearly results on Tuesday, had to postpone it to November 14.
Airtel only released its operational highlights for the quarter on Tuesday.
The company has reported a 28 per cent jump in its average revenue per user (ARPU) at ₹128 for the quarter ended September 30 compared with ₹100 in the corresponding period last year. On a sequential basis, the ARPU remained flat against ₹129 in the April-June quarter.
Revenue from mobile services was reported at ₹10,812 crore during the quarter, up 7 per cent from ₹10,070 crore in the July-September quarter last year. Its subscriber base, however, declined to 279.43 million in the last quarter on a YoY basis as against 332.7 million in the corresponding period last year.
Meanwhile, Vittal, during the call, informed that the company has no plans to shut down 2G and it was only 3G which was getting shut.
“There is no plan to shut down 2G because even in circles like Delhi, there is a substantial amount of revenues that are still from 2G networks. We are able to shut off on 3G networks since the revenues are insignificant – in the lower single digits. And therefore we took the call to shut that off... 2G will still have some runway for the next few years,” Vittal said.