A day after a panel of secretaries was formed to suggest ways to mitigate financial stress in the telecom sector, Bharti Airtel on Wednesday said it is in the best interest of all parties to formulate a "constructive mechanism" to ensure that large levies, including AGR, can be addressed in a "fair manner".
Asserting that telecom operators in India have invested billions of dollars in developing the telecom sector and providing world-class services to customers, Sunil Mittal-led Airtel said the Supreme Court's decision comes at a time when the sector is facing severe financial stress.
Senior leadership of Airtel, in an investor call on Wednesday, said the company is hopeful that the government will take a "balanced approach" on the AGR (Adjusted Gross Revenue) issue to ensure long term viability of the industry.
"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 resolve in a fair manner," Badal Bagri, chief financial officer of Bharti Airtel, said addressing the investor call.
The company had on Tuesday released its operating highlights for the three months ended September 2019, but postponed the release of its full Q2 earnings to November 14 citing the uncertainty that has arisen in the sector in the wake of the recent Supreme Court ruling on definition of telecom revenue.
"We are evaluating the judgement in detail and its overall implication and accordingly request that we won't be able to comment on it much," Bagri said, even as questions around the burning issue and its impact on the company continued to dominate the investor call.
Bharti Airtel Chairman Sunil Mittal and his brother Rajan Mittal had on Monday met Telecom Minister Ravi Shankar Prasad and Telecom Secretary Anshu Prakash in the aftermath of the October 24 Supreme Court order that accepted the government's way of calculating revenues of the companies, based on which statutory dues to exchequer are calculated.
According to the DoT's calculations, Bharti Airtel faces a liability of around Rs 42,000 crore after including licence fees and spectrum usage charges, while Vodafone-Idea may have to pay about Rs 40,000 crore.
The telcos are pitching for a waiver of interest and penalties on the unpaid amount, as well as staggering payment of principal licence fee over 10 years, sources said.
The government has constituted a Committee of Secretaries to work out a financial bailout package that may include lowering of spectrum charges as well as ending the era of free mobile phone calls and dirt cheap data.
The Committee of Secretaries, headed by Cabinet Secretary Rajiv Gauba, has been asked to examine "all aspects" of "financial stress" faced by service providers such as Bharti Airtel and Vodafone Idea and suggest measures to mitigate them, sources in the Department of Telecommunications (DoT) said.
Meanwhile, Airtel said that it has no plans to shut down its 2G network.
The company, during the investor call, also stated that it does not want to look at temporary price movements triggered by regulatory changes but would rather look at more sustained price increases.
Asked about Jio's new tariff, Bharti Airtel MD and CEO (India and South Asia) Gopal Vittal said, "We have maintained that tariffs are unsustainable and are low and must go up, so we welcome any move to increase tariffs."
"We have historically been at a premium to our competition in pricing, and the only thing we would like to do is not look at temporary price movements led out of regulatory changes but look at more sustained price increases. The current move is a tariff only meant for off-net calling based on regulation, and if regulation were to unpeel then that tariff will go away," he said.
Hence Airtel has not made any decision to respond accordingly, he added.
While detailed Q2 numbers will be released around mid-November, Bharti Airtel said its revenue from India mobile services rose 7 per cent year-on-year during the September 2019 quarter to Rs 10,981.4 crore, while the subscriber base stood at 279.4 million.
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