Bharti Airtel Clears ₹8,325 Crore in Spectrum Dues to Government

Jan 25, 2024: In a strategic move to manage costs effectively, Bharti Airtel Ltd made a significant payment of ₹8,325 crore to the government on Tuesday, settling a portion of the deferred liabilities associated with the spectrum it acquired during the 2015 auctions. This payment is part of the broader effort by telecom companies to navigate financial obligations efficiently.

During the 2015 auctions, Bharti Airtel secured 111.6 MHz of spectrum for ₹29,130.20 crore, with an initial payment of ₹7,832.58 crore as per the regulations at that time. The recent payment aligns with the spectrum acquired in previous auctions, with liabilities scheduled for annual instalments from 2026-27 to 2031-32, featuring an interest rate of 10% and an average residual life of over seven years.

Airtel had previously made payments of ₹8,024 crore in July 2023 and ₹8,815 crore in March 2023, well ahead of the due dates for the same spectrum, showcasing a proactive approach to financial commitments.

Despite these payments, Airtel still has outstanding dues from the spectrum acquired in the 2015 auctions. During an earnings call in November 2023, Airtel executives indicated that dues ranging from ₹10,000 to ₹12,000 crore were pending for the spectrum obtained in the said auctions. In 2014, Airtel also acquired 128.4 MHz spectrum for ₹19,051 crore, including spectrum from Telenor’s India unit.

The government, as part of a rescue package in September 2021, granted telecom companies the flexibility to prepay deferred liabilities. This package included a four-year spectrum payment moratorium, the option to convert spectrum-related interest and other dues into equity, and reduced bank guarantees.

Bharti Airtel and Reliance Jio Infocomm Ltd have leveraged affordable financing options to settle high-cost liabilities and refinance loans. Airtel had previously prepaid ₹15,519 crore for the spectrum acquired in the 2014 auctions.

Reliance Jio, a formidable competitor, took significant strides in clearing dues by prepaying ₹41,583 crore to the telecom department since October 2021, covering liabilities for all spectrum acquired in auctions before March 2021. These strategic financial moves by telecom giants underscore their commitment to financial prudence and proactive management of obligations.