Bharti Airtel to approach DoT on AGR in coming days: Gopal Vittal

Airtel's Gopal Vittal said the company will reach out to the government on AGR dues after the Supreme Court allowed a full reassessment of Vodafone Idea's liabilities

Telecom firm Bharti Airtel will approach the government on the adjusted gross revenue (AGR) it has to pay the exchequer following the Supreme Court’s judgment that the government can reassess all AGR dues, according to Vice-Chairman and Managing Director Gopal Vittal. 

 

“We are pleased that the court has allowed this for reconciliation. We are now going to be taking one step at a time. So first we want to reach out to the government, and that is something that the company will do over the coming days, then we’ll take it from there,” the executive said on Tuesday at the earnings call for the quarter ended September.

 

 

The telecom-service provider, the second-largest in the country, had sought a review of its AGR owing to apparent errors, but its previous petitions had been rejected. 

 

The comments came after the Supreme Court on Monday allowed the Centre to take a call on the adjusted gross revenue (AGR) dues of Vodafone Idea (Vi) instead of just the additional demand of ₹9,450 crore, of which ₹5,606 crore pertains to 2016-17. The court had modified its earlier order of October 27, and stated that the government could go ahead with a comprehensive reassessment and reconciliation of Vi’s AGR dues up to 2016-17. Vodafone Idea’s liabilities were then estimated at ₹58,254 crore, and are now ₹83,400 crore.

 

“We’ve always maintained that the AGR judgment of 2019 was a body blow to the industry. The fact that even errors of calculation were not entertained was even more disappointing. We welcome the fact that the recent order of the Supreme Court. We are now planning to take up our matter with the government,” Vittal said. 

 

Bharti Airtel had earlier asked the Department of Telecommunications to convert its AGR dues of nearly ₹40,000 crore into equity, as was done in the case with Vodafone Idea, in which the government has taken about a 49 per cent stake by converting the telco’s dues of ₹36,950 crore as part of the relief package issued for the telecom sector in September 2021, when a four-year moratorium on spectrum payment was provided to all carriers. 

 

Airtel had said that the conversion of dues into equity would give the government a 3-4 per cent stake in the carrier. The AGR payments to the government on an annual basis will begin in March next year. At present, Airtel’s AGR dues are close to ₹44,000 crore. 

 

Investment in data centre, Indus stake raise

 

Airtel will increase investment in its data centres, under Nxtra, as it builds the Vizag data centre for Google, besides the terrestrial network and cable-landing station. The company will allocate additional capital to acquire land in key locations and expand capacity even as it looks to expand market share in the digital-infrastructure segment from 10-12 per cent.  

 

“We’ve been investing about ₹1,500 crore a year in Nxtra. We see opportunity to build greater capacities in data centres. We will allocate more capital to buy land in right places and continue to invest in the partnership with Google in Visakhapatnam.”

 

While Nxtra will build data centres, Airtel Business will create terrestrial connectivity and bring up cable-landing stations.

 

Airtel is one of two partners selected to execute parts of the 1-gigawatt data centre for Google. 

 

Having decided to raise its stake in Indus Towers by 5 percentage points, Vittal said the move would allow the company to extract more value from the tower company, which was a dividend-paying asset and yet greatly undervalued compared to its global peers. The stake purchase could be executed over time, in one or more tranches. He, however, said there was no intention of bringing Nxtra into the Indus fold.  

 

Airtel is seeing traction in its cloud business under Xtelify, with over 70 enterprise conversations underway and six deals signed across manufacturing; banking, financial, services and insurance; and distribution. The company is also in discussion with several public-sector units for cloud partnership.

 

Vittal reiterated the need for tariff repair and a correction of the pricing architecture of tariff plans in India. 

 

“It’s one-size-fits-all pricing where you don’t have as much avenue for upgrade through the growing affluence that you are likely to see over the coming years,” he added. 

 

Airtel was also piloting dual 5G — non-standalone (NSA) and standalone (SA) — and going towards 5G Advanced, which will be commercially rolled out in the coming months, Vittal added. 

 

“We’re now in the process of transitioning our 5G network towards 5G Advanced by introducing dual NSA plus SA mode and migrating our FWA (fixed wireless access) users to that. Today, our FWA customers across 13 circles are experiencing our dual-mode 5G network with SA. For the mobile network, pilots are underway for 5G dual mode in a couple of circles, and we plan to make it commercial in the coming months as traffic on our 5G network grows.”

 

Over the next five to six years, Airtel will refarm 4G spectrum to standalone 5G in phases.