Vodafone Idea Down With Biggest Quarterly Loss in Indian History, How Did It Come to Be

Following the events of the past few weeks in the telecom industry, the situation of Bharti Airtel and Vodafone Idea has gone from bad to worse, because of the events that conspired, thus changing the definition of the Adjusted Gross Revenue (AGR) as newly defined by the Supreme Court of India. While Bharti Airtel has posted a loss of Rs 23,045 crore in the June-September quarter after provisioning for the new AGR based license fee and Spectrum Usage Charges (SUC) dues, Vodafone Idea is in the worst possible situation financially as the telecom operator has recorded losses worth Rs 50,921.9 crore which is the highest ever recorded loss in the Indian corporate history. As per an ET report on the matter, Vodafone Idea has set aside Rs 25,680 crore, and Bharti Airtel has set aside Rs 28,450 crore as per the statements issued by these companies on Thursday. An executive from one of the telecom operators has also remarked saying that the losses are actually “notional accounting losses” and not actually operational losses, meaning that if relief comes from the government, these figures might actually come down.

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Bharti Airtel and Vodafone Idea Unsure About Payment of Dues

There is a term being thrown around by the telecom operators, and the companies are terming it as a matter of “going concern” meaning that the company has the ability to meet its financial obligations for the next 12 months. On this matter, the Sunil Bharti Mittal led telecom operator has said that it might not be able to raise additional funds to pay for the dues that have come up as the result of the new Supreme Court order on the matter of AGR. The company has also added that although the management could try to raise funds, but there could be no assurance about the extent to which the attempts to procure funds would be successful and whether or not it would happen in a timely manner.