Telecommunications services companies Vodafone Idea and Bharti Airtel posted massive net losses of Rs 50,922 crore and Rs 23,045 crore for the July to September 2019 quarter, according to the firms’ audited financial results filed with the BSE on Thursday. In the July-September 2018 quarter, Bharti Airtel had posted a profit of Rs 118 crore, Mint reported. However, Vodafone Idea had suffered a loss of Rs 4,947 crore.
Vodafone Idea’s net loss is the biggest quarterly loss in the history of India Inc, The Economic Times reported. The previous record was set by Tata Motors, which posted a loss of 26,961 crore for the December quarter of 2018.
Bharti Airtel and Vodafone Idea posted huge losses because of an adverse Supreme Court judgement last month that upheld the Centre’s broader definition of revenue, based on which it calculates levies on telecom operators. In its order, the top court had excluded revenue from non-core telecom operations, such as rent, dividend and interest income in the reporting of financial results. The court had rejected the definition of adjusted gross revenue that the telecom operators had proposed.
Subsequently, the Department of Telecommunications of the Union government asked telecom operators to assess their dues and pay them within three months. Bharti Airtel, in a statement on Thursday, said it has provided for an additional amount of Rs 28,450 crore as a charge for the July to September quarter, with respect to the license fee, as well as spectrum usage charges, based on the Supreme Court judgement, CNBC reported.
Vodafone Idea’s net loss was almost five times of its consolidated revenue from operations which fell year on year to Rs 10,844 crore in the September quarter. The figure for the same quarter in 2018 had been Rs 11,270 crore. “Following the Supreme Court judgement in the AGR [adjusted gross revenue] matter, the company has recognised a charge of Rs 256.8 billion [Rs 25,680 crore] in the financial statements,” Vodafone Idea said in the statement it filed with the BSE.
Meanwhile, this is only the second quarterly loss for Bharti Airtel in the last 14 years, Mint reported. The company’s net loss for the second quarter of 2019-’20 exceeded its consolidated revenue from operations, which grew 4.9% year on year to Rs 21,131 crore.
The company’s revenue from telecom services in India from July to September was Rs 10,811 crore, up from Rs 10,724 crore in the April to June quarter. Its subscriber base grew from 27.68 crore in the first quarter of 2019-’20 to 27.94 crore in the second quarter.
Shares of Vodafone Idea on the National Stock Exchange plunged 22% in intra-day trade, and closed 18.92% down at Rs 3 per share. On the other hand, shares of Bharti Airtel fell by over 3% in intra-day trade before recovering slightly in the afternoon.