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

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Bharti Airtel posted a consolidated net loss of $3.23 billion (230.4 billion Indian rupees) after the telco took charge of a one-time $4.3 billion potential outstanding payment to the government related to a court dispute surrounding 14-year-old adjusted gross revenue.

 

The telecom company is selling assets and paying down debt while losing money on its operations and facing a Supreme Court ruling to pay overdue fees related to spectrum and licences.

 

Net loss was Rs 23,040 crore for the three months ended September, the India’s third-largest wireless carrier said in a statement at weekend.

 

That compares with the Rs 1,420 crore losses based on average analyst estimates. Revenue came in at Rs 21,130 crore.

 

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 $490.2m (S$668m).

 

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 $3bn 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.

 

In related development, Bharti Airtel has called banks out to raise up to $3bn (around Rs 21,000 crore) predominantly to pay the dues on account of adjusted gross revenue (AGR).

 

A senior executive with a global bank said the obligation to pay the AGR dues as fallout of the Supreme Court ruling was expected to put huge pressure on the existing resources of the mobile operator.

 

A Bharti Airtel spokesperson declined to comment on the company’s plans to raise fresh funds from banks.


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Telecom

FG Plans EO to Criminalise Fiber Cable Damage Costing Telcos Billions

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Nigeria will criminalize the destruction of broadband fiber cables following repeated complaints by MTN Nigeria Communications Plc and other telecommunications companies that they are losing billions of naira, according to people familiar with the matter.

FG Plans EO to Criminalise Fiber Cable Damage Costing Telcos Billions

Federal ministry of works, which supervises federal road constructors, is finalizing the regulation that will be signed as an executive order by President Bola Tinubu, said the people, asking not to be identified as they weren’t authorized to comment.

While there are presently laws against vandalism, the authorities are aiming to regulate construction firms more closely.

The order will enforce stiff penalties on offenders, said the people, declining to provide more details or say when it will be signed.

“Telecom assets are critical backbone that supports the economy across sectors,” said Temitope Ajayi, a senior presidential aide, who noted that the Association of Telecommunications Companies (ATCON) has been demanding the classification for years.

New rules will provide “further assurance that the Nigerian government will protect their investments against vandals and criminal elements.”

The Nigerian Communications Commission (NCC) estimates that the sector will make up more than a fifth of the country’s gross domestic product by the end of 2027, up from 13.5% in the third quarter of last year.

The move will help alleviate pressure on the telecoms sector, which is facing increased operating costs and sales pressures from a sharp depreciation in the currency and a threefold increase in energy prices.

Repairs and revenue losses from damaged cables is estimated to have cost the sector almost 27 billion naira ($23 million) last year alone, documents seen by Bloomberg show.

MTN Nigeria, the biggest wireless operator in Africa’s most-populous nation, and Airtel Africa Plc bore the brunt of the costs, the documents show.

MTN suffered more than 6,000 cuts on its fiber cable last year, the documents show. On Feb. 28, a cut on its network in three different locations by a road construction firm, an oil serving company and someone burning rubbish in a manhole meant customers faced more than five hours of data and voice outages.

The operator relocated 2,500 kilometers (1,553 miles) of vulnerable fiber cables between 2022 and 2023, at a cost of more than 11 billion naira – enough to build 870 kilometers of new fiber lines to areas without coverage.

A presidential order on the matter would be welcomed, said Tony Izuagbe Emoekpere, president, Association of Telecommunications Companies of Nigeria.

“When it comes to communication infrastructure, they are destroyed at will, so we are eagerly awaiting the president’s order,” he said. “It would be a great boost to the industry, and it will also encourage investment.”

 

 


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Telegram Eyes 1Bn Users amidst Political Pressures

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Telegram, the messaging giant founded by Pavel Durov and headquartered in Dubai, anticipates hitting a remarkable milestone of one billion active monthly users within the next year.

Durov’s departure from Russia in 2014, prompted by governmental pressures to stifle opposition communities on his VK social media platform, underscores Telegram’s commitment to neutrality despite geopolitical challenges.

With 900 million active users currently, Telegram stands as a beacon of free speech in the digital realm, particularly influential in former Soviet Union republics and pivotal during conflicts like the Russia-Ukraine standoff.

Durov’s staunch advocacy for freedom of expression and opposition to censorship by tech giants like Apple and Google reinforces Telegram’s status as a neutral platform.

Opting for the UAE as its base, Durov cites its neutrality and openness as conducive to Telegram’s ethos, serving both opposition groups and governments alike while maintaining impartiality.

In Durov’s vision, the pursuit of freedom eclipses material gain, shaping Telegram’s trajectory as a bastion of digital liberation.

 

 


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NITDA, NIMC Announce Collaboration To Strengthen Digital Economy

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To further strengthen Nigeria’s digital economy in line with President Bola Ahmed Tinubu’s Renewed Hope Agenda, the National Information Technology Development Agency (NITDA) and National Identity Management Commission (NIMC) have announced a collaboration on National Public Key Infrastructure (PKI) and Digital Public Infrastructure (DPI) to enhance and create synergy between digital identity, payment ecosystem, and secure & seemless data exchange capabilities for Nigeria.

During the meeting between the Director-General of NITDA, Kashifu Inuwa Abdullahi, and Director General of NIMC, Engr. Bisoye Coker-Odusote, with some management staff of both organisations, they discussed various initiatives, which include building DPI stacks for a secured and seamless data exchange and forming partnerships to transform the national identity system.

This collaboration also aims to harness the potential of the innovative ecosystem and emphasise the use of Public Key Infrastructure (PKI) to drive digital transformation in Nigeria.

To ensure a smooth implementation, a 12-man committee was set up. This committee will play a crucial role in kickstarting and harmonising the initiatives. It is expected to deliver a comprehensive implementation report within the next 4 weeks


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