Coming down heavily on the Department of Telecommunications (DoT) for not taking coercive action against telcos for failing to repay, the apex court ordered contempt proceedings against Bharti Airtel and
Vodafone Idea, Bharti Airtel and Tata Teleservices had filed modification applications on the time schedule to make payments of over Rs 1 trillion that they owe to DoT as AGR.
The apex court also pulled up the DoT desk officer who wrote to the Attorney General asking him to not insist on payemnt of dues. The SC issued a contempt notice to the officer to explain why no action should be initiated against him.
The court summoned managing director, director of all telcos including Bharti Airtel, Vodafone Idea
and others on March 17 to explain why these dues were not deposited despite orders and why contempt action must not be taken against them for non-compliance of order.
Other telecom stocks also declined. Bharti Infratel slipped 5 per cent to Rs 227.95 while Tata Teleservices was locked in 10 per cent lower circuit at Rs 3.28. Bharti Airtel also slipped 1 per cent before quickly paring the losses.
Yesterday, Vodafone Idea had also reported a consolidated loss of Rs 6,439 crore for the December quarter (Q3FY20). The telecom services provider had posted loss of Rs 5,005 crore in the same quarter of last fiscal.
In two weeks prior to the Q3 results, Vodafone Idea's stock had underperformed the market by falling 24 per cent, as compared to a marginal 0.18 per cent rise in the S&P BSE Sensex. It hit an all-time low of Rs 2.61 on November 15, 2019 on the BSE.
Vodafone Idea posted revenues of Rs 11,089 crore during the quarter under review, down 6 per cent over the year-ago quarter, and this was in line with analyst estimates.
However, on a sequential basis, the company posted a growth rate of 2.3 per cent. While the price hike has not so far been reflected in the performance, the gains on a sequential basis were led by 4G additions and improvement in average revenue per user (ARPU). While 4G addition growth was 9.4 per cent, ARPU growth was 1.8 per cent. On a YoY basis, ARPUs were up 22 per cent.
In Q3FY20, the company's earnings before interest, tax, depreciation, and amortisation (Ebitda) margins (excluding Ind AS 116 impact) stood at 11.6 per cent vs 10.2 per cent in Q2FY20.