Bharti Airtel on Friday said it has prepaid Rs 7,904 crore to the department of telecommunications (DoT) to clear high cost deferred liabilities for spectrum acquired in 2012 and 2015.
With this, the company has fully prepaid all its deferred liabilities pertaining to spectrum acquired the 2012 and 2015 auctions, it said in a release.
This has been done to save on interest costs as the spectrum dues for 2012 and 2015 carried a higher interest rate of 9.75% and 10%, respectively.
In FY24, Airtel prepaid Rs 16,349 crore high cost deferred liabilities towards spectrum acquired in 2015 ahead of the payment schedule.
In 2015, Bharti acquired spectrum worth Rs 29,130 crore in the auctions. The company had paid around Rs 7,833 crore upfront for the spectrum acquired. After that, Airtel also prepaid about Rs 8,815 crore in March 2022. The amount paid towards spectrum dues by the company was inclusive of interest.
Earlier, Airtel had prepaid Rs 15,519 crore for spectrum acquired up to the auctions in 2014 .
Notably, Airtel generated an annual free cash flow of Rs 40,800 crore, according to analysts. This is despite higher capital expenditure (capex) towards 5G rollout.
In the near-to-medium term, Airtel is expected to use its cash essentially to de-leverage and reduce the cost of financing, Airtel CEO Gopal Vittal had said earlier.
In August 2022, Airtel acquired 4G/5G spectrum worth Rs 43,084 crore.
Prepayment of spectrum dues by telecom companies has also helped DoT to surpass its receipts targets in recent years. In FY24, DoT receipts stood around Rs 83,500 crore.
