NEW DELHI: Bharti Airtel's chief executive Gopal Vittal said that the recent average gross revenue (AGR) judgement of the Supreme Court (SC) was disappointing, and the telecom operator is taking legal advice on the next steps.
"Our request was to permit correction of computational errors in the AGR demands by DoT. These apparent errors have a significant implication on the overall AGR demand. While we are disappointed with the recent outcome, the company has provisioned for the onerous pay out and already paid over Rs 18,000 cr covering its obligations for the first few years as per the directions of the Supreme Court," Vittal said during the earnings calls.
On the next steps relating to any review petition, Vittal said that the company will be guided by legal advice and "no decision has been taken on this yet."
Vodafone Idea is also planning to move a review petition as they try to get their AGR dues reduced. Airtel has AGR dues worth Rs 43,980 crore, of which it has paid Rs 18,004 crore.This January, Airtel had moved the apex court seeking a modification, clarification or recall of “mistaken orders”, which have allowed the Department of Telecommunications (DoT) to demand a total of Rs 43,980 crore as AGR dues. According to the telco’s own estimates, Airtel owes the DoT Rs 13,004 crore in AGR dues. But the SC had rejected the self-estimates and confirmed the government’s calculations.
Airtel, in its January plea, had said the errors in the DoT’s calculations of the AGR dues stem from duplication in revenue addition, incorrect interest rate for calculating spectrum usage charges (SUC), payments made by the telco not factored in, amongst others.
However, its plea along with that of Vi and Tata Teleservices, was rejected by SC on July 23, dealing a body blow to Vodafone Idea’s attempts to continue to be viable, while hurting Airtel’s coffers as well.
Vittal said that Airtel's balance sheet sheet continues to remain strong with healthy cash flows and a Net Debt/Ebitda of just about 3 - a position that is comfortable.
He added that Airtel's business has been generating strong cash flows for many quarters, which has been a result of revenue growth, strong operating leverage and effective deployment of capital.Over the past few months, Airtel announced multiple monetisations in Africa in the form of tower sales as well as
stake sales in Airtel Money. Following a 200 million dollar investment in Airtel Money by TPG, a $100 million
investment by MasterCard and the sale of tower companies in Madagascar and Malawi, Airtel has also recently announced an additional $200 million investment from Qatar Investment Authority in the mobile money business in Africa.
"The total proceeds of close to a billion dollars from all these transactions will be used for deleveraging," Vittal said.
Recent SC judgement on AGR disappointing; taking legal advice on review petition: Airtel CEO Gopal Vittal - ETTelecom.com
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