Bharti Airtel pitches for healthy telecom sector, Vodafone Idea's survival
Bharti Airtel on Wednesday pitched for a healthy telecom sector with three players, and said Vodafone Idea’s survival will be good from the ‘investment and reputation’ point of view for India.
In the company’s post-earnings conference call, Bharti Airtel’s Chief Financial Officer (CFO) Badal Bagri said the telecom sector was large enough to accommodate three players. “On Vodafone, I think my view is that they will remain and I wish that they thrive. India needs a three-player market and it’s a large-enough market place to absorb three players. I think it will be good from all perspectives — investment, jobs and reputation that Vodafone survives and thrives and I have no doubt that they will do so,” he said.
Airtel also said it would not buy the 5G spectrum in the upcoming auctions as the price is “too high.”
According to the price recommended by the Telecom Regulatory Authority of India (Trai), the cost of 100 megahertz of 5G spectrum would be close to Rs 50,000 crore. “We believe the price is too high. So, we will not pick it up at those prices,” Bharti Airtel’s Chief Executive Officer (CEO) Gopal Vittal said in a post-earnings call with investors on Wednesday.
In December 2019, the Digital Communications Commission (DCC), the apex decision-making body in telecom, gave its nod to spectrum auction plans, entailing 8,300 MHz of airwaves pan-Indian at a reserve price that adds up to Rs 5,22,850 crore. Meanwhile, Airtel said it would shut down its 3G network in 11 circles across the country. “We have completed 3G shutdowns in 11 circles and reformed spectrum to 4G,” said Vittal. The company said capex would be utilised towards re-farming the 3G spectrum for 4G services as the consumption of the latter has increased.
Bharti Airtel on Tuesday posted a net loss of Rs 1,035 crore for the quarter ended December 31, 2019 (Q3), as it provisioned for the interest accrued on account of adjusted gross revenue (AGR) payment. This is the company’s third consecutive quarterly loss; it had recorded a profit of Rs 86 crore in the year-ago quarter. On the operational front, the company posted an improvement in average revenue per user (ARPU) from Rs 128 to Rs 135, sequentially.
Mobile revenues have witnessed year-on-year (YoY) growth of 9.6 per cent on the back of focus on quality customers, up-trading and the recent tariff actions in some parts. Liabilities and provisions as of September 30, 2019, aggregated to Rs 34,260 crore (comprising principal of Rs 8,747 crore, interest of Rs 15,446 crore, penalty of Rs 3,760 crore, and interest on penalty of Rs 6,307 crore).
On October 24, 2019, the Supreme Court delivered a judgment upholding the view of the Department of Telecom (DoT) in respect to the definition of AGR. The apex court has allowed three months to the affected parties to pay the amount due to the DoT.
A review petition in this regard, too, was rejected in January. Thereafter, the telecom operators have filed an application for modification of the supplementary order before the Supreme Court, which is pending disposal. As on December 31, Airtel had 419 million customers, an increase of 3.7 per cent from 403.7 million in the corresponding quarter in the last financial year.