Shares of telecom firms Bharti Airtel, Vodafone Idea soared on Friday after reports that the government is mulling fixing of a minimum price for calls and data.
Shares of telecom firms Bharti Airtel, Vodafone Idea soared on Friday after reports that the government is mulling fixing of a minimum price for calls and data. Bharti Airtel shares zoomed more than 9% to hit the day’s high at Rs 395 on BSE. Vodafone Idea shares zoomed more than 10% to hit the day’s high at Rs 3.25 on BSE. A committee of secretaries has sought recommendations from Department of Telecom (DoT) on setting a minimum charge for all tariffs for telecom players and also assessing the impact it will have on telecom operators, CNBC TV18 reported citing sources. This move is seen to be beneficial for the two firms who are reeling under financial stress, especailly after their record Q2 loss.
Vodafone Idea and Bharti Airtel yesterday reported a combined loss of nearly Rs 75,000 crore for the second quarter ended September 30, 2019 results after the Supreme Court asked telecom companies to pay Rs 92,000 crore to the government as Adjusted Gross Revenue (AGR). Yesterday, Bharti Airtel posted its biggest consolidated net loss at Rs 23,045 crore for the September quarter on the back of provisions for the licence fee and spectrum usage charge based on the definition of the Supreme Court of what constitutes adjusted gross revenue. This the second consecutive loss after 14 years. The company made an exceptional charge during the quarter of Rs. 22,394 crore (net of tax) which comprises a charge on account of licence fee and SUC of Rs. 16,815 crore and Rs. 11,635 crore, respectively.
Vodafone Idea has reported a net loss of Rs 50,922 crore for the quarter, implying the highest ever net loss reported by an Indian firm. The mega loss came on the back of an exceptional charge of Rs. 25,680 crore it took during the quarter, due to Supreme Court’s ruling on adjusted gross revenue (AGR) issue. The company has made a provision for potential payments that it will have to make to the department of telecommunications (DoT).