Airtel Posts Record Loss After $4.3 Billion One-Time Charge

(Bloomberg) -- Bharti Airtel Ltd. reported a record quarterly loss as it took a one-time charge of 307.1 billion rupees ($4.3 billion) to pay fees related to a court ruling, and as competition with Reliance Jio Infocomm Ltd. dragged down tariffs.

Net loss was 230.4 billion rupees for the three months ended September, the India’s third-largest wireless carrier said in a statement Thursday. That compares with the 14.2 billion rupee loss based on average analyst estimates. Revenue came in at 211.3 billion rupees.

Key Insights

• Bharti, once the top carrier in India by subscribers, dragged Singapore Telecommunications Ltd. also into its first quarterly loss. Singtel, as an investor in Bharti’s holding company, made a provision in its books for the unprofitable carrier and posted a net loss of S$668 million ($490.2 million).
• Sunil Mittal-helmed Bharti is selling assets and paying down debt while losing money on its operations and facing a Supreme Court ruling ordering it to pay about $3 billion in overdue fees related to spectrum and licenses.
• India’s top court last month ordered the country’s carriers to pay a combined 920 billion rupees, dealing a blow to Bharti and Vodafone Idea Ltd., which were already struggling to keep subscribers and revenue amid a price war with upstart Reliance Jio. Wireless carriers have sought relief from the government, with rival Vodafone Idea Ltd.’s parent calling the situation ‘critical’.
• The latest numbers are a “humongous loss” for Bharti, said Sanjiv Bhasin, executive vice president at IIFL Securities Ltd. “The government should take sincere efforts to find solutions to the real problems of Indian telcos,” he said. “It needs to find a right balance between bailouts and levies.”

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• Bharti Airtel had 304 million subscribers in the quarter
• Read more earnings details here
• Earnings were announced after the close of trading hours but Bharti’s $750m 5.65% perpetual notes slumped the most since Oct. 24
• Vodafone Idea is also set to announce its earnings on Thursday.

To contact the reporter on this story: P R Sanjai in Mumbai at psanjai@bloomberg.net

To contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, ;Arijit Ghosh at aghosh@bloomberg.net, Dave McCombs, Bhuma Shrivastava

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