Airtel prepays Rs 8,325 crore to clear 2015 spectrum dues

Airtel

Bharti Airtel has prepaid Rs 8,325 crore to the Department of Telecom (DoT) towards partial payment of the deferred liabilities of spectrum it acquired in the 2015 auction. The advanced payments will help Airtel save costs annually and boost cash flow ahead of the next round of spectrum auction, which is likely to happen within this fiscal year.

"Bharti Airtel has prepaid Rs 8,325 crores to the Department of Telecom (Government of India) towards part prepayment of the deferred liabilities pertaining to spectrum acquired in the auction of the year 2015, which were at an interest cost of 10 per cent," the company said in a statement to exchanges on January 23.

The Sunil Mittal-led telco won 111.6 MHz of spectrum worth Rs 29,129.08 crore in the auctions in March 2015 and had paid Rs 7,832.58 crore upfront as per the rules. Subsequently, it made two prepayments of Rs 8,815 crore and Rs 8,024 crore in March 2022 and July-end 2023, respectively.

In December 2021, Airtel prepaid Rs 15,519 crore due to the government for the spectrum it acquired in the 2014 auctions.

Airtel bought spectrum in the last auctions, for which liabilities were due in annual instalments from 2026-27 to 2031-32. This carried an interest rate of 10% and an average residual life of more than seven years.

Airtel is currently in the process of rolling out its nationwide 5G network. The telco also needs to renew spectrum worth Rs 4,200 crore this year. The spectrum in the 900 MHz and 1800 MHz bands in six circles, namely Jammu and Kashmir, Odisha, Bihar, Uttar Pradesh (East), West Bengal, and Assam, is set to expire this year.

In a November 2023 earnings call, the telecom company stated it had yet to pay Rs 10,000-12,000 crore in dues for spectrum acquired through auctions in 2015.