Bharti Airtel prepays spectrum dues worth ₹8,465 cr

Clearing high-cost deferred liabilities, telecom major Bharti Airtel (Airtel) has prepaid ₹8,465 crores against spectrum acquired in 2016. "Bharti Airtel (“Airtel”) has prepaid ₹8,465 crores to the Department of Telecom (Government of India) against spectrum acquired in 2016. These liabilities carried an interest rate of 9.3%," the telco says in a statement today.

Airtel's announcement comes around 10 days after the Supreme Court rejected curative petitions from Bharti Airtel, Vodafone Idea, and other telecom operators seeking a re-computation of their AGR dues. The telecom companies had challenged the 2019 verdict, which mandated payment of AGR dues worth ₹92,000 crore to the government, alleging grave errors in the Department of Telecommunications (DoT) calculations and arguing the imposed penalties were arbitrary. However, the SC upheld its earlier decision, reaffirming that no revaluation of AGR dues would be allowed.

Adjusted Gross Revenue (AGR) of the telecom service sector increased by 1.88% sequentially to ₹67,835 crore in the December 2023 quarter, as per the Trai data. On a year-on-year (YoY) basis, the AGR, which represents the earnings of telecom companies from telecom services and specified items, grew by 7.84%. Bharti Airtel's AGR in the access services category rose by 3.2% quarter-on-quarter (QoQ) to approximately ₹20,480.58 crore in the December quarter, showing a YoY growth of 11.98%. For Reliance Jio, the AGR increased by 2.67% QoQ to ₹24,862.85 crore, with a YoY growth of 10.08%. On the other hand, Vodafone Idea, which recently completed its ₹18,000-crore follow-on public offer, experienced a 0.65% sequential dip in its AGR to about ₹7,459.08 crore in the December 2023 quarter, up 1.78% YoY.

India's second-largest telecom service provider Bharti Airtel Ltd recorded 158% year-on-year growth in its consolidated net profit at ₹4,160 crore for the April-June quarter of 2024-25 compared to ₹1,613 crore profit in the year-ago period. The company's consolidated revenues for Q1’25 stood at ₹38,506 crore, up 2.8% YoY, which was impacted by currency devaluation in Africa.

Bharti Airtel stock closed 1.46% down at ₹1,709.90 on the BSE today, in line with the benchmark BSE Sensex, which closed 1.49% down at 84,299.78 points. Airtel shares hit the day's low at ₹1,704.20 during the intra-day trade before settling at its closing price of ₹1,709.90, taking the company's m-cap to ₹9.73 lakh crore. Bharti Airtel shares have risen 69.13% in the past year, while their six-month return stands at 40.74%. The scrip's one-month and year-to-date gains are 9.04% and 69.13%, respectively.

Brokerage HDFC Securities, in its commentary on September 16, 2024, said Bharti Airtel has the highest Average revenue per user (ARPU) for India mobile services in the industry and has benefitted the most from tariff hikes in the last 4 years.