Vodafone Idea Q2 losses at Rs 50,921 cr; makes provision of Rs 25,680 cr for AGR liability

Telecom operator, Vodafone India on Thursday reported a whopping loss of Rs 50,921 crore for the quarter ended September 2019, mainly hit by the Supreme Court’s verdict on the Adjusted Gross Revenue (AGR). This is the highest-ever quarterly loss posted by any Indian company in recent memory, PTI report said.

#2QWithCNBCTV18 | Vodafone Idea Q2 net loss at Rs 50,921.9 cr Vs loss of Rs 4,873.9 cr (QoQ). Co says post SC ruling on #AGR, co accounted for Rs 27,610 cr related to license fee pic.twitter.com/J17p4RK1Tv

— CNBC-TV18 (@CNBCTV18Live) November 14, 2019

The company’s revenue was up 42 percent to Rs 11,146.4 crore, during the quarter. The telecom firm estimated a total liability of Rs 44,150 crore post-SC order and made a provision of Rs 25,680 crore in Q2 FY20, according to a PTI report. The company said that its ability to continue as going-concern is dependent on obtaining relief from the government and a positive outcome of the proposed legal remedy. The SC order on the AGR matter “has significant financial implications for the industry”, VIL said in a statement. Ravinder Takkar, managing director and chief executive of Vodafone Idea, said in a statement the company was “in active discussions with the government seeking financial relief” after the ruling, according to a Reuters report. Vodafone Idea, a combination of the local unit of British Vodafone Group Plc and billionaire Kumar Mangalam Birla’s Idea Cellular, also said it was in the process of filing a review petition with the Supreme Court. Earlier in the day, Bharti Airtel posted a highest-ever loss of Rs 23,045 crore during the second quarter ended 30 September. The consolidated revenue of Bharti Airtel was up by 4.7 percent at Rs 21,199 crore in the just-concluded quarter. Vodafone Idea, Airtel and other telecom operators may have to pay the government a whopping Rs 1.4 lakh crore following the recent Supreme Court order, according to an ANI report. According to an internal estimate prepared by the Department of Telecommunications (DoT), the total dues on the telecom service providers arising out of SC order is around Rs 1.33 lakh crore. As per estimate, the liability of Bharti Airtel Group is Rs 62,187.73 crore, Vodafone Idea Rs 54,183.9 crore and BSNL and MTNL Rs 10,675.18 crore. Last month, the Supreme Court upheld the government’s position on including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer. Earlier this month, Brickwork Ratings downgraded Vodafone Idea’s rating on non-convertible debentures (NCDs) citing the recent Supreme Court ruling on AGR and extension of timeline with regard to the sale of stake in Indus Tower to Bharti Infratel. The rating agency has downgraded Vodafone Idea from A plus with negative outlook to A minus watch with negative implications. Brickwork’s downgrade follows similar action by Care India Ratings and Crisil India Ratings and Crisil on the telecom major’s long-term issuer ratings on NCDs worth Rs 3,500 crore. -- With additional inputs from agencies