DoT gets over Rs 1,000 crore from Jio, Airtel, Vodafone Idea in first batch of payments for new 5G spectrum

5G auction

The Department of Telecommunications received over Rs 1,000 crore this fiscal from the winning bidders of 5G spectrum in the recently ended auction. Reliance Jio, Bharti Airtel, and Vodafone Idea have opted for 20 equal annual instalments.

Reliance Jio paid just over Rs 95.7 crore, Vodafone Idea paid approximately Rs 315 crore, and Bharti Airtel deposited Rs 595 crore for spectrum payments, according to sources. Both Airtel and Vodafone Idea had previously paid Rs 85 crore and Rs 30 crore, respectively, for interim spectrum usage, which was adjusted in the first installment.

The development comes after the Department of Telecommunications (DoT) sent demand notices to all three private telecom operators for their spectrum purchases and asked them to pay the amount in 10 days.

In the recent spectrum auction, which concluded on June 26, Bharti Airtel made a substantial investment, acquiring 97 MHz of 5G airwaves worth Rs 6,856.76 crore. Vodafone Idea also made a notable purchase, securing 30 MHz of 5G spectrum for Rs 3,510.40 crore. Reliance Jio, on the other hand, made its lowest-ever investment in spectrum auctions, buying spectrum worth Rs 973.62 crore.

Bharti Airtel and Vodafone Idea have renewed spectrum in circles where permits expire, receiving provisional spectrum in those areas. The government raised a modest Rs 11,340.78 crore from its second 5G spectrum sale, with Bharti Airtel emerging as the top buyer amid predictably subdued bidding activity.

As per the DoT documents, telcos were given two payment options. The first option permits companies to make either the full payment or a portion of the upfront payment, covering a minimum of two years and extendable in whole-year increments. Operators opting for this method can benefit from a moratorium corresponding to the upfront payment period.

The remaining balance will be paid in equal instalments over the remaining term, with annual payments due at the beginning of each year. This ensures the bid amount's net present value (NPV) is maintained at the applicable interest rate.

The second option entails paying the bid amount in 20 equal annual instalments, maintaining the NPV at the applicable interest rate, and making payments at the start of each year.