Airtel on Thurday posted a mammoth net loss of Rs. 23,045 crores in its July-September quarter as against loss of Rs. 2,866 crores in Q1 on heavy provisioning towards the DoT’s AGR amount which has to be paid in three months as per the Supreme Court order. Bharti Airtel’s results come three weeks after the apex court upheld the government’s broader definition of revenue, on which it calculates levies on telecom operators, dealing a Rs. 92,000 crores blow to the telecom industry, which is already burdened with falling tariffs and mounting debt.
The Gurugram-based operator’s net loss exceeded its consolidated revenue from operations which grew 4.9 percent year on year to Rs. 21,131 crores in the September quarter.
“On October 24, 2019, the Supreme Court of India delivered a judgement in relation to a long outstanding industry-wide case upholding the view considered by Department of Telecommunications in respect of the definition of Adjusted Gross Revenue This Court Judgement has significant financial implications on the Company. The Court has allowed a period of three months to the affected parties to pay amounts due to DoT,” the company said.
Airtel said the company is hopeful of relief but in the absence of the same, has provided for an additional amount aggregating Rs. 28,450 crores as a charge for the quarter comprising principal of Rs. 6,164 crores, interest of Rs. 12,219 crores, penalty of Rs. 3,760 crores, and interest on penalty of Rs. 6,307 crores with respect to the license fee as estimated based on the court judgement and spectrum usage charges (SUC) as estimated based on the definition of AGR.
Thus the liabilities/provisions as at September 30, 2019 aggregate Rs. 34,260 crores (comprising principal of Rs. 8,747 crores, interest of Rs. 15,446 crores, penalty of Rs. 3,760 crores and interest on penalty of Rs 6,307 crore).
In a statement, Gopal Vittal, MD and CEO, India & South Asia, said: “Despite being a seasonally weak quarter, we witnessed positive revenue growth in Q2 on the back of various initiatives aimed at providing superior differential services through our Thanks platform. We continue to witness strong data traffic growth of 81 percent YoY and added 8 mn 4G customers on our network during the quarter. We remain committed to strengthening our network and providing a superior experience to our customers.
“Before exceptional items, the net loss stood at Rs. 1,123 crores. The company’s India revenues increased by 3 percent on year-on-year basis to Rs. 15,361 crores. On the AGR verdict of the Supreme Court, we continue to engage with the government and are evaluating various options available to us. We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry,” he said.
Mobile data traffic on the network grew to 4,661 PBs in the quarter and growth of 81 percent YoY. Consolidated EBITDA was at Rs. 8,936 crores while onsolidated EBITDA margin is at 42.3 percent, up 10.8 percent YoY. India revenues for Q2’20 at Rs. 15,361 crores have increased by 5.7 percent YoY (reported increase of 3.0 percent) on an underlying basis.
Mobile revenues have witnessed a YoY growth of 7.1 percent. Mobile data traffic has nearly doubled to 4,497 PBs in the quarter as compared to 2,478 PBs in the corresponding quarter last year. Mobile 4G data customers increased by 56.9 percent to 103.1 mn from 65.7 mn in the corresponding quarter last year.
MTNL Consolidated Loss Widens to Rs. 653 Crore in June Quarter: All Details
State-owned telecom company MTNL on Friday reported narrowing of consolidated loss to Rs. 653 crore in the June quarter. The company had posted a loss of Rs 688.69 crore in the same period a year ago. The consolidated revenue from operations of MTNL fell by about 17 per cent to Rs. 250.72 crore in the first quarter of the current fiscal, according to a regulatory filing.
In the year-ago period, the same stood at Rs. 301.15 crore.
In a note, auditors of MTNL have previously stated that the company’s net worth has been fully eroded.
The note said the Department of Public Enterprises has declared the company as an incipient sick Central Public Sector Enterprise and the same has been confirmed by the Department of Telecom.
The consolidated financial result of the holding company has been prepared on a going concern basis keeping in view the majority stake of the government, the note said.
In July 2022, the Union Cabinet approved raising of sovereign guarantee bonds for MTNL for an amount of Rs 17,571 crore for the next two financial years.
On August 8, Bharti Airtel revealed that consolidated revenue from operations rose to Rs. 32,805 crore in the June quarter. The telecom operator reported a 22.2 percent increase in quarterly revenue, on the back of new 4G subscriber additions and increased data consumption.
A month ago, India’s largest telecom operator Reliance Jio Infocomm reported a nearly 24 percent year-on-year rise in its standalone net profit to Rs. 4,335 crore for the June 2022 quarter. Billionaire Mukesh Ambani-led Reliance Jio clocked revenue from operations of Rs. 21,873 crore in the just-ended quarter, which was 21.5 percent higher than the year-ago period, according to a filing.
5G Will Help Overcome Connectivity Barriers Faced by India
Four days of intense bidding and India’s leading telcos and other entities committed over $19 billion (roughly Rs. 1,50,460 crore) in the 5G auctions initiated by the government of India. A total 72 GHz of radio waves worth at least $54 billion (roughly Rs. 4,27,600 crore) had been on offer for sale in the world’s second-largest telecom market. The excitement for 5G is palpable and comes at a time when both urban and rural are neck to neck when it comes to driving growth in internet users – at 351 million versus 341 million respectively. A recent report by IAMAI and data analytics firm Kantar has revealed that while rural internet penetration has increased to 37 percent in 2021, urban penetration has remained between 66 percent – 69 percent since 2019.
5G services are expected to be rolled out as early as September this year and there is both enterprise and consumer excitement around the rollout. Riding on the back of gigabit speeds – expected to be around 10x of current 4G speeds, 5G is expected to deliver enhanced user experience, as well as help create new business models and services, in addition to improving network performance, and reliability. 5G also comes at a time when satellite broadband is coming into its own – led by global brands such as OneWeb (owned by Intelsat and Bharti Airtel), Elon Musk’s Starlink and Amazon’s Project Kuiper and will provide competition to terrestrial networks especially in remote regions where terrestrial networks have operational challenges.
While the two technologies can complement each other (satellite broadband is used to provide backhaul services to terrestrial networks), the two will also compete with one another specific to providing high speed data services to enterprises and subsequently, even to individual households. While it stands to reason that 5G networks will benefit individual subscribers, it will also provide a plethora of connectivity options to enterprises as well – enabling them to offer a host of connected services to customers that was simply not possible with 4G networks earlier. Examples of this could be sectors linked to IoT networks, connected vehicles and traffic systems, or advanced mobile cloud gaming.
So, what makes 5G significantly superior to previous generation networks? As the fifth-generation cellular network, 5G can offer speeds that are up to 100x faster than that offered by previous generation 4G networks – this in turn will give rise to new opportunities for both individuals and enterprises. This ultra-fast connectivity combines with ultra-low latency and higher bandwidth and will help advance societies, transform industries and dramatically enhance day-to-day experiences.
5G’s low latency and high bandwidth speeds offer improved support for real-time applications and data-rich mobile apps, thereby resulting in better overall UX.
While the 5G auctions have just happened in India, 2022 actually marks two years since 5G was launched. Elsewhere and in India as well, its transformative effects on communication and connectivity will only be felt when legacy 4G/LTE networks are completely done away with. The possibilities are endless – a world where cars never have accidents; a world where diabetic patients can use technology to monitor their health round-the-clock with real time interventions if needed; where smart homes, smart factories and even smart cities become the norm and not the exception – 5G can be the catalyst that enables all this and more.
A new development enabled by the government when auctioning 5G spectrum, which will have profound impact on private industry is the enablement of highly secure and private networks. These are networks that will be leveraged for use by a single operator and not for the public. It could be a manufacturing organisation, a logistics operator or an infrastructure company (such as an organisation that manages airports) or any other enterprise that has mission critical operations that require 24-7, always-on and reliable connectivity – where any bandwidth downtime is unacceptable. This is where a private network would be the ideal option to go with. While this isn’t unique to 5G and can also be deployed leveraging 4G LTE and satellite broadband, 5G with its high latency, higher speeds and higher bandwidth will be more compatible and better suited for third party operations.
The area where 5G will be transformative is on the Internet of Things (IoT) domain. Though 4G/LTE is currently being used to support industry and consumer IoT applications, 5G has key advantages which cannot be matched by the earlier cellular technologies. The domain where it will be most applicable is meters, tracking devices and sensors that are currently the most widely used IoT devices. By 2022, Ericsson suggests that over 29 billion connected devices will be using 5G with 18 billion of these being IoT related.
As more people are coming online, devices are consuming more amount of data than ever, which has become the topmost issue for telecom operators as it crams the bands of the radio frequency spectrums. 5G will overcome this barrier through network slicing, which will allow operators to “slice” up resources wherein they will be able to share more idle resources and increase overall usage. Thus, operators will have better utilisation of their networks and would be able to handle more users and transfer more data simultaneously. Security, a primary concern for both carriers and businesses, is the other area where 5G will have an upper hand when compared to legacy networks. 5G architecture is designed to provide opportunities for better and more granular security capabilities on the carrier side. It addresses threats faced by 4G/3G/2G networks and its security architecture enables significant performance benefits and diversity of applications as it utilises network slicing, cloud-based resources, and virtualization. Another powerful impact 5G brings is that it is capable of protecting customer identity meaning that individual connections are better safeguarded from rogue devices that might try to capture phone calls by mimicking cell towers. Understanding these new security measures will be critical to ensuring businesses build better, more comprehensive and secure services.
Overall speaking, telecom operators and businesses are now better positioned to reap the benefits 5G brings that can improve mobile communications. The long-term advantages of 5G will outweigh the disadvantages of 5G, and the technology is bound to introduce new opportunities for businesses to become more agile and competitive over time.
The author is the CEO, Realme India, VP, Realme, and President, Realme International Business Group.
Disclaimer: The opinions expressed within this article are the personal opinions of the author. Gadgets 360 is not responsible for the accuracy, completeness, suitability, or validity of any information on this article. All information is provided on an as-is basis. The information, facts or opinions appearing in the article do not reflect the views of Gadgets 360 and Gadgets 360 does not assume any responsibility or liability for the same.
DoT Invites Application From Firms Willing to Set Up Private Telecom Network
The telecom department has invited applications from enterprises willing to set up captive non-public networks to undertake demand studies for direct assignment of spectrum to entities, an official statement said on Wednesday.
Enterprises having net worth more than Rs. 100 crore and are willing to set up captive non-public networks by obtaining spectrum directly from the Department of Telecommunications (DoT) are invited to participate in the exercise.
The government had issued the ‘guidelines for Captive Non-Public Network (CNPN) licence’ on June 27 with an aim to establish the legal framework for CNPNs.
“The guidelines provide that the enterprises seeking to establish CNPN may obtain spectrum on lease from telecom service providers or directly from DoT. These guidelines also provide that the DoT will undertake demand studies for direct assignments of spectrum to enterprises setting up CNPNs,” the statement said.
DoT has now launched a module on the Saralsanchar portal for carrying out the demand studies.
“Enterprises having net worth more than Rs. 100 crore and willing to set up CNPNs by obtaining spectrum directly from DoT are invited to participate in this exercise,” the statement said.
The window for applications is open from August 10 to September 9.
The DoT has come up with the provision of direct spectrum allocation to enterprises for CNPN despite opposition by incumbent telecom operators.
The department also has to seek Trai’s view on the price at which the spectrum should be allocated to the enterprises.
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