Airtel Prepays Rs 7,904 Cr In Spectrum Dues

Telecom giant Airtel has prepaid Rs 7,904 crore to the Department of Telecom (DoT), settling the remaining dues for spectrum acquired in the 2012 and 2015 auctions. 

This move, announced late Friday, is expected to generate significant interest cost savings and enhance cash flows as the telecom giant nears the completion of its nationwide 5G rollout.

This latest prepayment follows Airtel's previous payment of Rs 8,325 crore in January 2024, which cleared a substantial portion of its deferred liabilities. These efforts reflect Airtel's commitment to reducing its debt and managing high-interest payments efficiently. The spectrum liabilities from the 2012 and 2015 auctions had been subject to interest rates of 9.75 per cent and 10 per cent respectively.

Airtel has consistently worked on prepaying its spectrum-related dues over the past few years. In July 2023, the company prepaid Rs 8,024 crore to the DoT, and in March 2022, it cleared Rs 8,815 crore for airwaves bought in the 2015 auction. This was followed by a significant prepayment of Rs 15,519 crore in December 2021, which cleared all dues related to spectrum purchases in 2014.

These prepayments are part of Airtel's strategy to manage its finances more effectively, especially in light of the four-year moratorium on spectrum and adjusted gross revenue payments introduced by the Indian government in September 2021. This relief package, which also included reduced bank guarantees and the option to convert statutory dues into government equity, aimed to provide around Rs 48,000 crore in cash flow relief to telecom operators.