Vodafone Idea at risk of 'imminent bankruptcy': ICICI Sec

India's Vodafone Idea loss widens to $7 billion on outstanding government dues

Airtel, Voda-Idea report combined loss of ₹73,000 cr

Vodafone Idea's Q2 revenue stood at Rs 10,844 crore, a fall of 3.9% quarter-on-quarter. The company, which has slipped into the red after the aggressive entry of Reliance Jio in September 2016, was jolted further when the Supreme Court ordered telecom companies (on October 24) to pay back almost Rs 93,000 crore in past dues.

Analysts on average expected the company to report a consolidated net loss of 44.22 billion rupees for the quarter, according to Refinitiv data, although those figures did not include the charge. Vodafone Idea said its ability to continue as going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy.

Vodafone Idea, a combination of the local unit of British Vodafone Group Plc VOD.L and billionaire Kumar Mangalam Birla's Idea Cellular, also said it was in the process of filing a review petition with the Supreme Court.

The wireless carrier had posted a net loss of Rs. 4,974 crores a year ago.

For Vodafone Idea, the total income on a consolidated basis rose to ₹11,146.4 crore in the second quarter compared to ₹7,878.6 crore recorded during the same quarter a year ago. Articles appear on euronews.com for a limited time.

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Airtel said that the group will need significant additional financing to discharge its obligations under the court judgement.

These factors indicate that material uncertainty exists, casting significant doubts on the company's ability to continue and its ability to generate the cash flow that it needs to settle, or refinance its liabilities and guarantees, Vodafone Idea said.

Meanwhile, Bharti Airtel posted a staggering Rs 23,045 crore net loss in the latest September quarter due to provisioning of Rs 28,450 crore in the aftermath of the Supreme Court ruling.

The Voda Idea CEO is hopeful that the government may extend AGR-specific relief "on the (quantum) of interest, penalties and interest on penalties as well as the principal amount after adjustment for errors", adding that "a payment plan spread over a larger period of time would be very helpful".

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 crore blow to the telecom industry, which is already burdened with falling tariffs and mounting debt.

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But for the AGR provisioning, both Airtel and Vodafone Idea look to be stable in terms of their key operational metrics. Its EBIDTA was at Rs 3,347 croe, a huge drop of 9.1 per cent, while its margin dropped to 30.9 per cent.

The government has mandated that license and spectrum fee to be paid by operators as a share of their revenue.

On Wednesday, the DoT shot off notice to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court.

Mobile data traffic for Airtel almost doubled to 4,497 petabytes (PBs) in the quarter, as compared to 2,478 PBs in the corresponding quarter previous year.

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