On Wednesday, Bharti Airtel expressed hope that the government would opt for a “balanced approach” to the issue of AGR to protect the telecom industry’s long-term interests.
Airtel’s senior management said the company is hoping that the government will fairly resolve the AGR (Adjusted Gross Revenue) issue for the industry’s viability in an investor call on Wednesday.
“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,” Airtel’s Chief Financial Officer Badal Bagri said in the investor call.
“We also evaluating the judgment in detail and its implications,” he said adding since the matter was under litigation for a long period, there is a scope for a fair amount of consideration in the aspects of penalty and interests.
Mr. Bagri said it’s hard to say who’s going to make a final call, but it’s DoT (Telecommunications Department) who’s going to measure that number.
It comes one day after a Secretaries Panel was created to recommend ways to mitigate the telecom sector’s financial stress. Airtel said the decision of the Supreme Court comes at a time of severe financial problems facing the market.
The company released its financial highlights on Tuesday for the three months ended September 2019 but postponed the earnings due to the AGR order of the SC.
“We are evaluating the judgment in detail and its overall implication and accordingly request that we won’t be able to comment on it much,” Mr. Bagri said.
Marketshare is a powerful performance parameter. But the underlying drivers are more important, reducing the churn and network upgrade where refarming and investment spectrum has taken place and shutting down 3 G networks.
In this regard, Bharti Airtel Chairman Sunil Mittal and his brother Rajan Mittal met with Ravi Shankar Prasad, Minister of Telecom, on Monday. After including license fees and spectrum usage fees, Bharti Airtel faces a liability of around Rs. 42,000, while Vodafone-Idea may have to pay about Rs. 40,000. But the official latest demand-raising figures are awaited.
A Committee of Secretaries was formed to hammer out a financial bailout package that could include reducing spectrum rates and establishing a voice and data floor price.
The panel, headed by Cabinet Secretary Rajiv Gauba, was asked to consider “all aspects” of “financial stress” faced by service providers suggesting mitigation measures.