Vodafone Idea Suffers Massive AGR Hit; Posts Highest Quarterly Loss At Rs 50,921 Cr

In its regulatory filing, Vodafone Idea said that the SC order on AGR has resulted in liabilities on accounts of licence fee and spectrum charges to tune of Rs 44,150 crore which has to be paid within three months.

Vodafone Idea said that the SC order on AGR has resulted in liabilities on accounts. (Getty Image)

New Delhi: Telecom firm Vodafone Idea Limited on Thursday posted a massive net loss of Rs 50,921 crore in the quarter ended September 30 on account of the Supreme Court judgement on the Adjusted Gross Revenue (AGR) matter in addition to the ongoing competitive pricing war across the market. In its regulatory filing, Vodafone Idea said that the SC order on AGR has resulted in liabilities on accounts of licence fee and spectrum charges to tune of Rs 44,150 crore which has to be paid within three months. “Following the Supreme Court judgement on the AGR matter, the company has recognised a charge of Rs 256.8 billion in the financial statements," Vodafone Idea said in the statement on Thursday. The Department of Telecommunications (DoT) on Wednesday sent notices to the telecom companies, asking them to pay AGR dues on a self-assessment basis within the next three months. Earlier in the day, another telecom major Bharti Airtel posted  a mammoth net loss of Rs 23,045 crore in its July-September quarter as against loss of Rs 2,866 crore in Q1 on heavy provisioning towards the DoT's AGR amount which has to be paid in three months as per top court's order. Sunil Mittal-owned firm's net loss exceeded its consolidated revenue from operations which grew 4.9 per cent year on year to Rs 21,131 crore in the September quarter. Even Vodafone Idea's revenue slipped to more than half to Rs 10, 844 crore from Rs 22, 114 crore. Vodafone Idea said its ability to continue as going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy. The SC order on Adjusted Gross Revenue (AGR) matter "has significant financial implications for the industry", VIL said in a statement. According to reports, total loss of Vodafone Idea stood at Rs 50,921 crore in September quarter, against Rs 4,874 crore loss in the year-ago period. Its revenue rose 42 per cent to Rs 11,146.4 crore during the second quarter this year. The company has estimated liability of Rs 44,150 crore post the apex court order, and made provision of Rs 25,680 crore in the second quarter this fiscal. Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the recent Supreme Court order that has sent shock waves through the industry which is already grappling with losses and billions of dollars in debt. The Supreme Court, last month, upheld 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. As per latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies. (With inputs from agencies)