Bharti Airtel of Friday said it has paid Rs 8,815 crore to the Department of Telecommunications (DoT) toward part prepayment of deferred liabilities pertaining to spectrum acquired in the 2015 auction. The prepayment is for installments due in FY 2027 and FY 2028.
In December last year, the company had paid Rs 15,519 crore towards prepayment of the entire deferred liabilities pertaining to spectrum acquired in the auction held in 2014. Overall, the company has cleared Rs 24,334 crore of its deferred spectrum liabilities much ahead of the scheduled maturities. These liabilities carried an interest rate of 10% and have been paid off through a combination of strong free cash generated by business, equity proceeds and significantly lower cost debt of similar tenor.
Airtel said it continues to focus on financial flexibility via its capital structure, including optimising cost of financing and capitalising on all opportunities of significant interest saves like this prepayment.
After this, Bharti Airtel is left with spectrum dues of around Rs 66,000 crore payable in deferred installments. The company has already opted for a four- year moratorium on such payments, offered by the government.
Apart from Bharti Airtel, Reliance Jio had cleared its past spectrum auction liabilities by paying Rs 30,791 crore to the government.
The first auctions were held by the government in 2010 for 3G spectrum but at that time the companies had to pay the entire bid amount upfront. It was only in auctions held since 2013 that the government has introduced the concept of deferred payment. Under it, the companies are supposed to pay 25-33% of the total bid amount upfront, followed by a two-year moratorium and the remaining in equal installments spread over 16 years with the net present value intact.