Vodafone Idea, Airtel Shares In Focus Today. Here's Why
Telecom stocks will be in focus on Friday, a day after telecom majors Vodafone Idea and Bharti Airtel reported huge losses in the July-September period on account of high provisions for outstanding government dues. Vodafone Idea reported a consolidated net loss of Rs 50,900 crore in the second quarter to September. Rival private sector telecom company Bharti Airtel posted a consolidated net loss of Rs 23,045 crore in the same quarter.
Shares in Vodafone Idea ended 20.27 per cent lower at Rs 2.95 apiece on the BSE on Thursday, while the Airtel stock declined 1.59 per cent to Rs 362.65, ahead of the earnings announcements.
Last month, the Supreme Court rejected telecom companies' appeal against the government's definition of adjusted gross revenue (AGR), allowing the Department of Telecommunications (DoT) to recover dues worth Rs. 1.33 lakh crore from telecom companies Bharti Airtel, Reliance Communications (RCom) and Vodafone Idea.
The verdict came as a huge relief for the telecom department and as a big setback for the telecom operators, reeling under heavy debt and intense competition in the sector.
| Stock/Index | Change Since Supreme Court Order On AGR |
|---|---|
| Vodafone Idea | -47.79% |
| Bharti Airtel | +0.60% |
| S&P BSE Telecom | -6.25% |
| Nifty | +2.31% |
| Sensex | +2.48% |
The DoT and the mobile carriers have been at odds over the definition of AGR. The companies argue that AGR should comprise just revenue accrued from core services, while the DoT says AGR should include all revenue.
Telecom providers in India pay the Department of Telecommunications (DoT) nearly 3-5 per cent of their adjusted gross revenue (AGR) in usage charges for spectrum or airwaves and 8 per cent of AGR as licence fees.
