Bharti Airtel on Wednesday said it would not buy spectrum for fifth-generation (5G) telecom technology in the coming auction of air waves, as the price was “too high”.
The Telecom Regulatory Authority of India (Trai) has recommended that 100 MHz of 5G spectrum is worth close to Rs 50,000 crore. “Too high priced, we will not pick it up at those prices,” Airtel’s Chief Executive Officer Gopal Vittal said in a post-earnings call with investors on Wednesday.
In December 2019, the Digital Communications Commission, apex government decision making body in telecom, gave its nod to spectrum auction plans entailing 8,300 MHz of airwaves pan-India, at a reserve price that adds to nearly Rs 5.23 trillion. That apart, Vittal said Airtel had shut down its 3G network in 11 of the country's 22 telecom circles and re-farmed the spectrum to 4G (fourth-generation technology), mainly to cater to the higher demand for data.
The company on Tuesday had reported a net loss of Rs 1,035 crore for the quarter ended December 31, after making prvision for the interest which has accrued on account of AGR (adjusted gross revenue) payment to the government (which it and other telecom compoanies have to do by a recent Supreme Court order).
This is the company’s third quarterly loss in a row; it had a profit of Rs 86 crore in the December quarter of 2018.
On the operational front, its average revenue per user rose from Rs 128 in the September quarter to Rs 135.
Mobile revenues saw year-on-year growth of 9.6 per cent, on the back of a focus on quality customers, up-trading and rate hikes in some parts.
Liabilities and provisions, as of September 30, aggregated to Rs 34,260 crore (principal of Rs 8,747 crore, interest of Rs 15,446 crore, penalty of Rs 3,760 crore, and interest on penalty of Rs 6,307 crore). On October 24, the Supreme Court delivered a judgment upholding the view of the department of telecom on the definition of AGR. The apex court has allowed three months to the affected parties to pay. A review petition in this regard was rejected in January. Thereafter, telecom operators have petitioned for extra time to pay and related terms; this is pending.
At end-December 2019, Airtel had 419 million customers, an increase of 3.7 per cent from 403.7 million in the corresponding quarter of the past financial year. Total minutes of usage on the network during the December quarter were 836 billion, higher by 8.9 per cent over the same period a year before.
In January, it raised Rs 21,502 crore through a combination of new equity issuance via qualified institutional placement and issue of convertible bonds. The money is for augmenting its long-term resources and to strengthen the balance sheet.