NEW DELHI: Further provisions for interest costs associated with AGR liabilities have kept Bharti Airtel’s bottomline in the red during the third quarter, despite recording a sharp 48.3 per cent growth in EBITDA year-on-year. The telecom major has reported a consolidated net loss of Rs 1,035 crore for the period, after setting aside Rs 1,048.1 crore toward AGR interest payments. 

Consolidated revenue for the period stood at Rs 21,947 crore, up 8.5 per cent, and EBITDA at Rs 9,350 crore. The company had recorded a net profit of Rs 86 crore during the corresponding quarter of the previous year.

The Supreme Court had ruled in October last year that adjusted gross revenue (AGR) should also include the telecom license holder’s receipts from non-telecom operations. Since license fees and spectrum usage charges are calculated as a percentage of AGR, telcos have been directed to pay the government pending dues estimated at Rs 1.47 lakh crore. 

The ruling had seen Airtel post its largest net loss ever at Rs 23,045 crore during the second quarter, with Rs 28,450 crore set aside toward meeting this liability. For the third quarter,  “the Group has continued to recognise, in the same manner, its obligations… (and) has further recorded interest of Rs 1,048.1 crore which has been presented as an exceptional item,” it said in exchange filings on Tuesday. 

A modificatory petition filed by telcos seeking permission to negotiate a more sustainable payment schedule with the government is still pending before the SC. 

Despite this liability, however, Airtel has pointed out that recent equity and debt fundraising measures have netted it an aggregate Rs 21,507.1 crore, removing earlier uncertainty over its ability to carry on as a going concern. 

Operational metrics get stronger

If the financial impact of the AGR judgement is set aside, Airtel has continued to record steady improvement in unit economics. Average revenue generated per user (ARPU) has remained on the march upwards, aided by large scale tariff increases implemented in December. From Rs 100 at the end of September 2018, ARPU has increased to Rs 128 for the second quarter of the current fiscal and Rs 135 for the third. 

India revenues grew seven per cent year on year to Rs 15,797 crore, mobile services revenues by 9.6 per cent and 4G subscribers by 60.6 per cent. “While tariff revision… is a welcome step towards repairing the financial health of the industry, we believe tariffs must go up further for enabling the industry to invest in emerging technologies” said CEO Gopal Vittal.